After I saw the frontpage deal on the Chevy Trax, I went looking for a good deal. I found a nice deal, but the math nerd in me wants to understand how the numbers add up. Basically, I found a 2017 Trax selling for $19,895 and got the 5575 in rebates (including the 3000 conquest, no farm beraeu, no bonus tag). I did a one pay lease, I did the waived acquisition fee. 10k/24 mo.
According to the calculator i should have been paying 952 for the one pay lease (screenshot of calculator below). However, when I calculate by hand, I dont get the same number since cap cost 19895- 5575 = 14,320 and residual value is 14669.65 so my cap cost is < the residual value which I believe is not possible and then the online calculator basically breaks down because it makes the monthly payment negative.
Anyway, I approached a dealer by phone and he initially said my 952 didnt include doc fees and wanted 1151. I told him that was BS and he said I should come in which I refused to do without a price. He said to me, OK, I will swallow 150 and give it to you for $1000. That was close enough for me and a great deal so I went in.
When I got there, he promised me the car for the $1000 we agreed upon. His finance guy at first printed me the deal (pasted below) for 1151.40. I said no way because of our agreement and then he gave me a deal for 1000.16 (also pasted below). As far as I can tell, they lowered the selling cost of the car to achieve this (19758.60) although I still cant understand the math on how they came up with the numbers. They said its automatically calculated by their system and they had no idea what I was talking about with cap cost etc but it seems that my cap cost is below the residual.
Im not complaining, as i made a onetime payment and drove off with the car, but I’d love to understand for future deals. Thanks!
I leased a Sonata earlier this year for 150 a month and I thought that was a great deal. Ha, this was amazing! Wish I could have gotten rid of the Sonata and then gotten a VOLT or another car with these amazing incentives!
Its the difference in selling price, that’s causing the 150. Every penny you save on the selling price is one you won’t have to pay on the total lease payment. In this case its the 137 + 2 (dmv) + tax
Yes I understand why the price went down because of the selling price
What I don’t understand is how the deal even worked out with the cap cost being less than the residual?
Hmm and now I was just looking over my contract it looks like they didn’t do the rebates as cap cost reduction but instead applied them to a one time payment. This is not how my other lease worked though I didn’t do one payment lease. And it’s not how I see this person got his lease:
What are the implications of this exactly? Is this something I need gap insurance for? It looks like I made a 6500$ one time payment with 5500$ of it being rebates from Hyundai.
Do those numbers match what’s on your contract? I’m guessing they don’t match exactly as the bank probably would reject the application because cap cost is less than residual.
no, it turns out that when i looked more closely, my contract has nothing deducted for cap cost.
The rebates (around $5500) were applied instead to the one time payment of around $6500 so that I owed $1000.
I am unsure what the insurance implications are of that and if I have or need to acquire gap insurance? any ideas?
i know you usually want the cap cost down so that you are paying less depreciation, but with the low MF for onepay and the high rebates, it came out cheap this way also…
Does anyone have any comments on the lease? Is it typical that in a onepay lease, all of the rebate amount goes towards your one pay payment and not towards cap cost reduction?
Appears they didn’t use the ccr appropriately in an effort to force a net positive payment. If the ccr had been applied, your $570.25 in rent charge would have been $0 (mathematically negative, but realistically never should be). This way you end up paying a rent charge of $570.25. But, by excluding the amount from ccr, you didn’t pay 8.5% on the ccr ($473.86). This approach nets some financing income, which may benefit the dealership some(?). They could have possibly split the ccr up to net a $0 rent charge, but then the CCR would have been taxed. At best you could have saved less than $100.
Seems like a reasonable approach they took, that was a win-win for them and you.
yeah, i dont care about the money because the deal was so good and they wouldnt close for less than $1000 (i had originally come to then with an offer of 950 from the lease calculator).
I spoke to the financing guy today and he said they never use rebates for CCR for one pay leases, not sure if he is lying or whatever.
I am just worried about the insurance implications if the car is a total loss. Like the 5575 in rebates, if the car is totaled, does the company just lose that? and i would lose my 1000$? I could deal with the 1k but not if I was somehow responsible for the rebate $
My understanding is that your insurance (* verify with your actual insurance) would pay the market value - you should only be responsible for the residual value of the vehicle not the residual plus any discounts no matter the source. If you think the market value is less than the residual value, gap insurance would be appropriate - this is a decision for you to make regardless of the type of lease terms you have.
The typical financial risk identified with the one-pay is that you’ve already pre-paid taxes and the rent charge, and would be out that money if the vehicle was totaled before the end of the lease.
Thanks! Chevy automatically has GAP insurance, so it looks like if the car is a complete loss, I am out the $1000.
Worth the small risk for this amazing deal. Comes out to $42/month!
