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Comments
Negeative equity, like any other items that are capped in the lease, is added to the agreed upon value (i.e., sell price) to determine the gross cap cost. Cap reductions are deducted from the gross cap to determine the adjusted cap, upon which, the lease finance and depreciation charge is computed and, hence, the payment is determined.
Generally, negative equity can be capitalized in the lease as long as the amount advanced, usually measured by the adjusted capitalized cost, does not exceed the fund provider's maximum funding level which varies depending upon the provider. Typically, the range is 90% - 130% of the MSRP.
Another concern is that there are those states that tax negative equity and there are those that don't. You should check with your state's department of revenue to determine the tax treatment given negative equity.
Hope I've answered your questions.
John
The AutoLeaseGeek
I'm still trying to run the numbers to see if rolling the negative equity makes sense. I hate to do it again but the new payment would be around $200 less and could be directed to other debts with higher interest. Plus this would assure that its gone in 3 years and wont happen again. So many numbers to consider!
John
I'm new to purchasing and leasing cars.
I will be moving from NY to MD this summer. I am looking to possibly lease 2 cars in the month before I move to MD. I know I will have to register the car in MD to get Maryland license plates. But will I be responsible for paying NY taxes on the lease vehicle or maryland taxes (which taxes the final sale cost)?
I can't find any information online so far.
Would there be any gain from doing the lease in NY?
In order to register the car in MD you'll probably have to already have MD residency.
I would worry about moving within a month of leasing... NY collects their tax upfront, and if you roll it into the payment, you could end up paying tax twice. Hopefully, there would be some sort of offset, but why take a chance?
I would wait to lease in Maryland, either way... If you absolutely knew you could pay the NY tax, and not be taxed again in MD, then that would be the best way to go.. but, I think the timing (moving shortly after signing) might be what trips you up..
regards,
kyfdx
(serial lessee)
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My initial thought was that it may end up being cheaper to lease the car here in NY if I were to pay a higher sales tax on a smaller amount of money.
Because of my schedule, I really couldn't lease a car until memorial weekend at the earliest and hope to be in my new apartment by the 3rd week of June.
I guess as a side note. If I leased the car within NY, do I have to register the car in MD? I'll be in MD for only 12 months on a short contract. Where I go from there its still to be determined. I still have a texas drivers license.
Sorry, I'm new to a lot
Thanks for the replies. Very helpful so far.
I went into a dealership and leased a g37 coupe, the deal was for 12k, but the lease contract said it's for 10k only, but i didn't look at it ( i know, it's my fault) until i got the payment in mail and it stated that the lease was for 10k not 12k. So i called back and talked to the sale person and he was nice enough and said 12k was the deal in his notes and that the financial guy screwed up but unfortunately there is nothing he can do. He said he will put a note in the system stating that our car is actually 12k instead of 10k so when we return the car in 3 years, we won't have to pay for the extra 6k we drive. He couldn't give me that in paper though, and he said he couldn't redo the lease
my question is, is there a way that i can get something like this in writing or have they re do the lease?
i know it's my fault not reading it clearly when signing contract, but i thought the finance guy needs to go over everything on the lease when we sign it, and obviously we would catch this mistake if he actually go over one by one
any suggestion?
thank you
'11 GMC Sierra 1500; '08 Charger R/T Daytona; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '08 Maser QP; '11 Mini Cooper S
accident has a total cost of $960.00, I am having it repaired at the dealer where I purchased the vehicle- same toyota dealer,
Wise, unwise, or unnecessary to report it to the toyota leasing company?
1. deal with my current financial institution to get out of the lease
2. get new dealer to buy me out of the lease
3. use one of the lease swap or carmax service
'11 GMC Sierra 1500; '08 Charger R/T Daytona; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '08 Maser QP; '11 Mini Cooper S
IMHO, go in trying to get a price you are comfortable with and then bring up the lease. Then negotiate the residual (can be difficult) and the rate.
Now for my obligatory soapbox speech...don't take it personal:
If the only reason you're leasing is for a low payment and you don't have the financial means to get out of the lease early, I advise people to stay away. My rule is...if you can't pay cash for the vehicle, you shouldn't be leasing it. That's a pretty broad rule but it gets the point across. If you have very little cash at your disposal and just trying to get a nicer car than you can afford, a lease will just decrease your overall financial position in the long run. Buy a car you can afford and drive it for a long time.
'11 GMC Sierra 1500; '08 Charger R/T Daytona; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '08 Maser QP; '11 Mini Cooper S
Not true
> and you don't have the financial means to get out of the lease early
Not true
> Buy a car you can afford and drive it for a long time
Good advice, provided I am looking for a long term solution, which I am not.
I am considering a lease because I am looking to provide a vehicle to a family member for a 2-3 year duration only.
In any case, thanks for the response sebring95
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You would never buy a car based on payments only as that would be very foolish. The same holds true for a lease. Every leased car is a sold car. When you lease, you are actually buying that car on behalf of the fund provider or lessor. However, you're responsible for the payments and so it's in your best interest to negotiate selling price; not payment. The lease payment is dependent upon the selling price. The higher the sell price, the higher your lease payment. As such, you should know how to calculate the lease payment as welll as how to determine the gross cap, adjusted cap, and residual value. Remember the following...
Gross Cap = Selling Price + Amounts Financed (capitalized) in the lease
Adj. Cap = Gross Cap - Cap Reduction
Payment = MF x (AC + RV) + (AC - RV)/N
MF = Money Factor
AC = Adjusted Cap
RV = Residual Value = Residual Factor x MSRP
N = Term
As you can see, the sell price is a necessary ingredient in determining payment. When negotiating a lease, always ask for a quote. The best way to obtain a quote is to check the dealers inventory and select the vehicle you want (assuming it's in stock). Next, relay this information to the dealer and request a quote in the form of a Lease Worksheet which should include all of the following information...
MSRP
Selling Price (i.e., Agreed Upon Value)
Acq Fee
Documentation Fee
All government fees including license/reg/title fees
Sales Tax and Sales Tax ate
Customer Rebates
Money Factor (buy rate preferred)
Residual Factor & Annual Mileage Allowance
Residual Value
Lease Term
Payment
Now you have all the necessary data to craft your own one-page lease proposal. If you think the seling price is too high, you can change it and re-compute the lease payment. Two of the most costly mistakes people make when negotiating a lease are...
1. Negotiating payments instead of selling price
2. Allowing the dealer to control the deal
Hope this helps.
John
The AutoLeaeGeek
Purchasing a car I can see as being different because the total financing has to be in my favor...but, again with leasing, I'm having trouble seeing beyond mohthly payments.
The point is that what you perceive to be a low monthly payment may not even remotely mirror a good deal. Perceptions can be very misleading. Consequently, a lot of money is left on the dealer's table.
John
There are several factors that must be considered in addition to those described not the least of which is the money factor. Inflated money factors mean higher payments. Those with excellent credit should always insist on the buy rate when negotiating a lease.
What fees can I expect to pay upon purchasing a new lease and what are ballpark estimates?
Are taxes, tags and title included in the monthly cost calculation?
They can be but don't have to be... it's up to you. All or some of these costs can be capitalized or paid up front at lease inception.
What fees can I expect to pay upon purchasing a new lease and what are ballpark estimates?
Can't provide ball park estimates. Taxes vary widely from state to state and bank acquisition fees and dealer doc fees vary as well. For instance, Honda charges a $595 acquistion fee whereas Mercedes-Benz charges $795. Texas and Illinois levy sales tax on the purchase price (i.e., Agreed Upon Value) while several states like Florida, Indiana, and Arizona levy sales tax on the monthly payment... a huge difference. The maximum dealer doc fee that dealers can charge in Ohio is $250 while in NY it's $75 unless, of course, these state mandated maxims have changed.
Hope this helps.
John
TheAutoLeaseGeek
Thanks
John
For purposes of calculating the lease balance, a single-payment lease is considered to be a payment in escrow, from which the monthly payments are then taken, each month..
In event of an involuntary termination, then you'd receive the balance of the payments in return.
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'11 GMC Sierra 1500; '08 Charger R/T Daytona; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '08 Maser QP; '11 Mini Cooper S
We have been looking at other vehicles that we think we might be interested in when we surrender our current vehicles. We are going to have just (1) vehicle next time as we don't drive them enough to justify the cost of insurance, gas, and lease payment.
Since we are retired, would it be cost effective for us to lease another vehicle since we put on so few miles or should we buy a vehicle? We do not want a payment (leased or bought) over $550/mo. How can we get the most bang for our buck? Thanks
You sound like perfect candidates for leasing again, since you drive so few miles, and your driving circumstances aren't likely to change (e.g., you aren't going to get transferred to a new job). That's the downside for some younger lessees - they lease a vehicle, and then they move house or job, or have a baby, and the vehicle or the lease mileage limit is a problem.
If by "get the most bang for our buck" you mean you want the nicest vehicle you can get that fits in your budget, then again, my opinion is that you're a great candidate for leasing. Leasing generally allows you to have a lower payment on a nicer vehicle, since you are only paying for part of the vehicle's depreciation.
Let us know what vehicles interest you, and members can offer more advice.
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We have been thinking about "upgrading" to a Buick Enclave or Nissan Pathfinder or something in that range. We want another SUV because we need the extra space. When we looked at the Enclave my husband had sticker shock..haha
We had a 2006 Pathfinder LE (loaded!) that we traded for one of the Equinox's and although the Equinox is a nice car...it certainly isn't the Pathfinder
We've looked at the Ford Escape and taken it for a spin. It's in the same size and price range as our Equinox and has a couple more bells and whistles but we weren't overly thrilled with it. I think we're leaning more to a more nicer vehicle. I was tempted to look at the Edge while we there but they haven't had much of a rating.
We have always owned our own vehicles and we have excellent credit (we've worked all our lives for it!).
I'm trying to do research on vehicles that we might be interested in before we turn ours in next year. What I'm most concerned with is what the Residual will be.
We're NOT interested in Honda, Toyota, Mitsubishi, Kia or the like.
Any advice would be helpful. Thanks