Dealer is telling me that my rent charge calculation is wrong. Insists that “rent charge is calculated on monies down as well. That would include the rebates since they are considered money spent down.”
That strikes me as basing rent charge on the GROSS cap cost rather than the adjusted / net cap cost.
The quote they gave me has a line item for -$15,350 in “rebates”, which I used in my formula for monthly rent charge. They claim the rebate is included in rent charge; I disagree. Am I wrong?
They are talking gibberish and deciphering it would be a colossal waste of time compared to posting a link to an LH calc showing your target deal.
Below is my LH calc based on the quote they gave me
They are trying to calculate the rent charge based on (adjusted / net cap cost PLUS rebate $ amount), summing that, adding to RV, and then multiplying by the MF.
That seems wrong.
They actually GAVE me the actual MF amount. So even when I back into the MF figure they provided, my math works and theirs does not.
Yah, thats definitely not how that works. Find a new dealer.
Am I wrong?
If they say they have to INCLUDE the rebate in the calculation of the rent charge — then what actual good does the rebate do me in any way shape or form?
Net rent charge = ((adjusted cap cost + rv)*mf)*length of term.
Theyre incorrect in what theyre saying.
They just relented and said I’m correct. However, now they are literally attempting to claim they sent me “the wrong MF” rate are trying to up it from 284 to 341.
So very F’d
Cap reductions may include all of the rebate, a portion of the rebate, or none of the rebate. It depends on how the rebate is applied. For instance, rebates can be used to pay for all or some portion of the lease inceptions fees. Rebates are NOT money down UNLESS they are used as a cap reduction. Money down means the same thing as cap reduction.
Adj. Cap = Gross Cap - Capitalized Cost Reductions
Monthly Rent Charge = MF x (Adj. Cap + Res. Value)
Not necessarily. Again, rebates can be used in a variety of ways (e.g., as a cap reduction (i.e., money down) and/or to offset some or all of the lease inception charges).
Caveat: Some dealers will use the term “money down” as an all-inclusive term that not only captures cap reductions but lease inception fees as well. For this reason, I try to avoid the term “money down” as it can be confusing. I prefer terms like cap reduction, amount due at signing (DAS), etc.
Below is an example of how a 1500 rebate can be allocated to lease inception fees…
CCR 88.38
CCR Tax 9.28
Doc. Fee 200.00
Doc Fee Tax 21.00
DMV Fee 650.00
1st. Payment 531.34
TOTAL 1500.00
Rebate/Credit 1500.00
DAS 0.00
They can only take advantage of people incapable of moving on.