I’ve been working with a dealership and I can’t get the calculator to match their numbers. I’m in IL, tax is 7%. On their sheet they have tax as a dollar amount, perhaps that’s why it’s not lining up? Thoughts on this deal?
They may have a marked up MF
I asked for both the MF and residual, it was the same as I got from Edmunds. MF = .00207, Residual = 59%.
Are you taxed on total price of car upfront or only on monthly payment? Get them to break down the $2100 in taxes.
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In IL, you pay the sales tax on the cost of your car but you only owe tax on your monthly payment rather than on the total value of your vehicle. I’m also guessing that’s where the discrepancy is because the calculator doesn’t know that?? I’ll ask them for a breakdown. Thanks.
A few observations regarding the dealer’s lease WS…
- Illinois taxes the sum of the payment streams and not individual monthly payments.
- According to the dealer’s WS, you are capitalizing all fees, not paying them upfront.
- Your cap reduction (CCR) = 2774.20
- Your DAS = 2000.00
- Rebate = 1500.00
- DAS + Rebate – CCR = 725.80 which is your 1st payment paid at lease signing. Your DAS plus rebate covers your 1st payment plus CCR.
It appears that your sales tax rate may be 7.25%, not 7.00%. You may want to check this.
If I deduct the estimated 2100.00 sales tax from the net cap and re-calculate the payment, I get a base payment of 663.13 whose only purpose is to compute sales tax. I’m not a fan of estimates. Dealer calculations should be accurate, not estimates.
Your Illinois sales tax (see PDF’s below… I created the first one listed) is computed as follows…
Illinois Sales Tax Calculations.pdf (1.2 MB)
Illinois Lease Sales Tax.pdf (305.3 KB)
Instead of 2100.00 (although close). This means your net cap = 55996.08 so that your contractual monthly payment is…
Again, I’m assuming a sales tax rate = 7.25%. I’m also not a fan of online calculators and prefer to use my own calculator that I created in Excel and Mathematica. However, below is as close as I can get to the dealer’s WS without adding to or deducting from other fields with irrelevant data just to force the LH calculator to agree with the dealer’s WS. Note that I used a 7.25% sales tax rate, and checked the NY State box as Illinois taxes are calculated in much the same way that NY taxes are computed.
I wouldn’t pay a 2774.20 cap reduction. If you total the vehicle, you could lose all or some portion of your cap reduction. You’re chasing after the dealer and allowing them to control the deal. Bad idea! Instead, educate yourself about leasing and perform your own calculations. The biggest investment you can make is in yourself and the sky is the limit on the return. Create a professional-looking one-page, knock ‘em dead lease proposal. Make sure all calculations are spot on, otherwise you lose credibility. Email it to the dealer and do all negotiating via phone/email.
Questions? Let me know.
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It is people like this that make Leasehackr such an interesting place to learn!
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Thank you! I try.
IL actually is the total of the monthly payments due at signing, very similar to NY and also has a similar effect if you roll them in.
@delta737h maybe I’m missing something but where that does that $2,774 cap reduction come from in your calc? It looks like the dealership is telling him $726/mo with a total out of pocket of $2,000, not a down payment + other things.
If we just change OP’s calc to the NY tax method and roll the DAS to 2k total, it’s within a few dollars of the dealer worksheet
If you want to send me your ZIP, I can confirm the tax rate @Oso20
It’s the difference between the dealer’s gross cap and net cap. DAS = 2,000. Down payment is 2774.20 same as CCR.
I was within a $1 in my LH Calc. Note that the total amount due at signing is 3499 which is the rebate plus DAS. Backout the rebate and I’m at 2,000… the amount due at signing. I don’t like online calculators because often one must change different fields to values that bear no relationship than those described by the fields. Not long ago, I had to add something to the sell price that had nothing to do with sell price just to get the LH calcs to agree with the calcs of the dealer. It’s just bad accounting. Did you read my post? My posted LH calc is something I did for the benefit of the OP.
No need to backout anything. Just capitalize everything as the dealer is showing and down payment = $2000 due at signing minus first month payment. Agree that this looks like 7.25% tax rate. Can confirm with zip code.
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So you’re suggesting the LH calc doesn’t handle the rebates correctly in this scenario and that’s why you’ve moved it to the DAS?
Most dealer CRM’s have an option to quote with rebates being applied to the cap cost or being used as CCR or to cover amounts due at signing.
I don’t understand why you’re moving rebates to the DAS.
If you adjust the OP’s calc by simply rolling all fees as you suggest, adjusting taxes to 7.25% as you suggest, setting the NY method, and making the DAS 2k, you get the exact same net numbers as what you did…
Look at the dealer WS. The 2,000 is a down payment, not a rebate. It is money collected from the customer. At least that’s how the WS reads. What gave you the idea that the 2,000 is a rebate? Every WS I’ve seen always identifies rebates as rebates. Why would it be identified any differently? If it’s a rebate, then say it’s a rebate. I think you’re assuming it’s a rebate.
Not saying that at all.
Wow, thank you all for this, very helpful. My zip is 60010 and on the Lake County, IL side (as opposed to Cook County side).
You moved the $1500 rebate into the down payment section in your calc.
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Yeah, but now you’re showing a down payment of 1275 when the dealer WS shows a down payment of 2000. Down payment means the same thing as CCR. The down payment (CCR) is 2774.20, not 2,000. What you did is populate the tax incentive field with 1500 and the down payment field with 1275. Together, they sum to 2775 which is the CCR. You used the correct approach, but the terminology can be misleading especially for novices which is why I was apprehensive or reluctant to use your approach… fearing it could be confusing. They see down payment and immediately insert 2,000 based on the WS. I prefer to explain that the amount the customer owes at signing is obtained by deducting the rebate in my LH calc. Whereas, you would have to explain why the down payment is 1275 instead of 2,000. I believe I chose the path of least resistance. This is why I don’t like online calculators. However, I’ll repeat what I’ve said for quite a while… the best online calculator that I’ve seen is the LH calculator.
Dealers are often ambiguous in their use of the term “down” vs “das”. In this case, the dealer sheet doesn’t actually call anything a “down payment” (yes, “cash down” is similar terminology), so one would need to interpret their language. The value being listed as amount due points to the $2000 being the “due at signing” amount though.
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Ah, I see what you’re saying. You were referring to my LH calc. I was thinking in terms of my manual calculation. Online calculators only agitate me for which I have little use and no patience. I prefer my own software which is better than online calculators and is competitive with most dealer desking software.
Which is what I said. Dealer software terminology has always been an issue and sometimes nebulous. Makes me wonder whether those authoring them know anything about leasing terminology. Perhaps they should read Fed. Reg. M. That might help.