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How to Calculate Monthly Lease Payments

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Comments

  • ohenryxohenryx Posts: 285
    You don't buy the car that you are leasing, you do not own it. Thus there is NO tax advantage for trading in. In most states, you pay sales tax each month on the actual lease payment. In Texas, where I live, the leasing company pays the sales tax (on the entire purchase price) up front and then expects you to pay it back to them.

    http://www.leaseguide.com/articles/texas-auto-lease.htm

    You might want to do a google search and see how it works in the state where you live. But in no case (that I am aware of) do you get a "tax advantage" for trading in.
  • qbrozenqbrozen Posts: 25,966
    well, I can say in NJ you do. If I trade in a car worth $14k on a lease where I'm financing $14k in depreciation over the life of the lease, I don't pay tax on that depreciation cost.

    To answer the OP (I thought I answered this very question already... maybe in a different discussion): there is no excess tax refund because it isn't a refund, it is a credit, therefore it can never go less than zero.

    '18 BMW 330xi; '67 Coronet R/T; '14 Town&Country Limited; '18 BMW X2. 47-car history and counting!

  • jsdnjjsdnj Posts: 11
    edited October 2013
    Hi there. I am working a deal with a local dealership for a 2014 Cadillac ATS with MSRP of $48,415. This is what we have worked out:

    http://www.lolzilla.net/images/08507278119174813050.jpg

    The deal is set up with $2k out of pocket for me. However when I plug all numbers into this lease calculator, I get around $1500 due at signing and a slightly lower payment:

    http://www.lolzilla.net/images/89308216729744087755.jpg

    Can anyone tell me what I am missing? What I am doing wrong?

    Thanks
  • zkayzkay Posts: 8
    Kristie,

    First of all, thank you so much for the info on how to calculate the lease payments.
    I made a spreadsheet to run the numbers given the MF, Residual %age, Cap Cost etc.

    Some of my numbers are coming out off from what I am reading on this forum. I would really appreciate if you can glance over the following image and let me know what am I doing wrong, will take just a couple of mins. The calcs are here: http://imgur.com/mKfzR8Q

    Thanks!
  • delta737hdelta737h Posts: 622
    Greetings zkay!

    Don't mean to steal Kirstie's thunder but your first column calculations look just fine unless your inputs are incorrect. Where are you seeing discrepancies?

    John
    TheAutoLeaseGeek
  • Kirstie_HKirstie_H Posts: 11,077
    Steal away, John! I have no thunder, LOL. Calculating lease payments is out of my area of expertise, or even basic competence. I leave it to you experts to provide good info.

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  • The dealer said $400/month for a 36 month/12k miles/year with zero down
    Is this good ?
    Is this fair ?
    Does it mean anything without any other numbers like cap cost and residual and all that ?
    NY State.
    Thank you in advance for your answers, all !
    Please let me know if I need to get certain info from dealer to share with you so you can answer more accurately.
    I appreciate it. Please reply soon as I'm supposed to be signing in a couple of days.
  • Kirstie_HKirstie_H Posts: 11,077
    Hi - if you're still looking, our Santa Fe Lease Questions discussion would be a better place to compare what others are paying for their leases:
    http://townhall-talk.edmunds.com/WebX/.ef9da1d/0

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  • Hello, what is the monthly cost of leasing a 2014 BMW 320i xdrive in Mineral Grey Metallic with the Premium Package and heated front seats. Price of vehicle is $36,042.97 with a money factor of .00125 and a 52% residual. Only paying taxes and fees totalling $2,800. Your help is greatly appreciated.
  • smartin104smartin104 Posts: 42

    Hi.. general question: having difficulty figuring out how tax is calculated when leasing (in NJ @ 7%). is the tax applied to the base monthly lease (selling price less RV divided by lease term months) + monthly interest pymt (selling price + RV * MF)??

    I ask b/c the dealer wants a down payment and i believe that he mentioned that the payment would cover tax in some fashion. So am I paying the tax upfront in the down payment and then again in my total monthly? if that is the case then aren't you paying tax twice?

    or should i only be paying the tax on the monthly and that the down payment that is "supposed to go to tax" is actual cost cap reduction? but if you have already agreed upon a selling price, doesn;t that mean that that down payment is actually just reducing your incentives since your selling price is already agreed upon?

    Can someone please clarify when the tax is or should be applied to a lease deal in NJ?

    thank you in advance

  • tyleryactyleryac Posts: 11
    2015 Ford Fusion SE
    0.50% APR and 55% residual
    MSRP $25,702
    Negociated $24,000
    7% NJ Tax 
    36 months 10,500 miles 

    can someone please calculate. Thanks!

  • MichaellMichaell ColoradoPosts: 118,206
    tyleryac said:

    2015 Ford Fusion SE
    0.50% APR and 55% residual
    MSRP $25,702
    Negociated $24,000
    7% NJ Tax 
    36 months 10,500 miles 

    can someone please calculate. Thanks!

    $282.01/mo before tax ....

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    2015 Subaru Outback 3.6R / 2014 MINI Countryman S ALL4

  • tyleryactyleryac Posts: 11
    Thanks
  • jkern33jkern33 Posts: 24
    Hello -

    I'm looking to lease a 2015 Rouge SV (Prem Interior + Mats). I spoke to a sales manager last night and he came back to me with the following :

    MSRP = 29,000
    Selling Price = 26,225
    MF = ? Won't tell me
    Residual % = Wont tell me
    Mo Lease PMT = 310
    Mo Tax = 27.90

    I have my own analysis where I'm manipulating the numbers to get to his payment and it looks like the tax of 27.90 is being calculated based on the residual value of the car. Is this correct? PA tax is 6%.
  • MichaellMichaell ColoradoPosts: 118,206
    jkern33 said:

    Hello -

    I'm looking to lease a 2015 Rouge SV (Prem Interior + Mats). I spoke to a sales manager last night and he came back to me with the following :

    MSRP = 29,000
    Selling Price = 26,225
    MF = ? Won't tell me
    Residual % = Wont tell me
    Mo Lease PMT = 310
    Mo Tax = 27.90

    I have my own analysis where I'm manipulating the numbers to get to his payment and it looks like the tax of 27.90 is being calculated based on the residual value of the car. Is this correct? PA tax is 6%.

    In PA, the tax for a lease is calculated against the monthly payment.

    And, the tax rate is 9%, not 6%.

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  • jkern33jkern33 Posts: 24
    I think thing the tax in Philadelphia is 9% but I don't live within the city limits...I thought it was 6%?
  • jkern33jkern33 Posts: 24
    Am I missing something? See below?

    Pennsylvania sales tax is 6% of the purchase price or the current market value of the vehicle (7% for residents of Allegheny County and 8% for City of Philadelphia residents).
    Buying or Selling Your Vehicle in Pennsylvania - PennDOT ...
    www.dmv.state.pa.us/pdotforms/fact_sheets/fs-buysell.pdf

  • MichaellMichaell ColoradoPosts: 118,206
    jkern33 said:

    Am I missing something? See below?

    Pennsylvania sales tax is 6% of the purchase price or the current market value of the vehicle (7% for residents of Allegheny County and 8% for City of Philadelphia residents).
    Buying or Selling Your Vehicle in Pennsylvania - PennDOT ...
    www.dmv.state.pa.us/pdotforms/fact_sheets/fs-buysell.pdf

    It was my understanding that the 9% was specifically for leases.

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    2015 Subaru Outback 3.6R / 2014 MINI Countryman S ALL4

  • jkern33jkern33 Posts: 24
    okay yes you're correct...I just found it. it's 6% Sales Tax + 3% Use Tax (only applicable in PA)
  • MichaellMichaell ColoradoPosts: 118,206
    jkern33 said:

    okay yes you're correct...I just found it. it's 6% Sales Tax + 3% Use Tax (only applicable in PA)

    Shew! Had me worried there for a moment.

    FYI, the lease sales tax rate is 10% in Pittsburgh.

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    2015 Subaru Outback 3.6R / 2014 MINI Countryman S ALL4

  • wche1wche1 Posts: 25
    edited August 2015
    Can anyone help me figure out how sales tax was calculated on the following?
    (New York 8.875%)

    MSRP- 46,422
    Sale price- 42,044.38
    Sales tax- 1,276.74
    Acquisition fee- 700
    Cap cost reduction- 40
    Net cap cost- 43,981.12
    Depreciation cost- 11,949.94
    Residual (69%)- 32,031.18
    Rent charge (0.00115)- 2360.07

    =530.00/mo for 27 month lease

    Anyone help me with how NY tax is calculated please? I know they tax on sum of all payments and any non-dmv fees (only the 700 acquisition fee for this one since I paid doc fees upfront) thanks!
  • kyfdxkyfdx Everywhere, USAPosts: 126,124
    wche1 said:

    Can anyone help me figure out how sales tax was calculated on the following?
    (New York 8.875%)

    MSRP- 46,422
    Sale price- 42,044.38
    Sales tax- 1,276.74
    Acquisition fee- 700
    Cap cost reduction- 40
    Net cap cost- 43,981.12
    Depreciation cost- 11,949.94
    Residual (69%)- 32,031.18
    Rent charge (0.00115)- 2360.07

    =530.00/mo for 27 month lease

    Anyone help me with how NY tax is calculated please? I know they tax on sum of all payments and any non-dmv fees (only the 700 acquisition fee for this one since I paid doc fees upfront) thanks!

    You answered your own question. $530 X 27 X .08875

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  • wche1wche1 Posts: 25
    kyfdx said:

    wche1 said:

    Can anyone help me figure out how sales tax was calculated on the following?
    (New York 8.875%)

    MSRP- 46,422
    Sale price- 42,044.38
    Sales tax- 1,276.74
    Acquisition fee- 700
    Cap cost reduction- 40
    Net cap cost- 43,981.12
    Depreciation cost- 11,949.94
    Residual (69%)- 32,031.18
    Rent charge (0.00115)- 2360.07

    =530.00/mo for 27 month lease

    Anyone help me with how NY tax is calculated please? I know they tax on sum of all payments and any non-dmv fees (only the 700 acquisition fee for this one since I paid doc fees upfront) thanks!

    You answered your own question. $530 X 27 X .08875
    The 530/mo is with tax included. I can't figure out how the dealer got 1276.74 though
  • kyfdxkyfdx Everywhere, USAPosts: 126,124
    wche1 said:

    kyfdx said:

    wche1 said:

    Can anyone help me figure out how sales tax was calculated on the following?
    (New York 8.875%)

    MSRP- 46,422
    Sale price- 42,044.38
    Sales tax- 1,276.74
    Acquisition fee- 700
    Cap cost reduction- 40
    Net cap cost- 43,981.12
    Depreciation cost- 11,949.94
    Residual (69%)- 32,031.18
    Rent charge (0.00115)- 2360.07

    =530.00/mo for 27 month lease

    Anyone help me with how NY tax is calculated please? I know they tax on sum of all payments and any non-dmv fees (only the 700 acquisition fee for this one since I paid doc fees upfront) thanks!

    You answered your own question. $530 X 27 X .08875
    The 530/mo is with tax included. I can't figure out how the dealer got 1276.74 though
    Again: $530 X 27 X .08875

    Did you get a good deal? Be sure to come back and share!

    Edmunds Moderator

  • Can you plz help with my monthly lease payment calculation...the online calculators seem to come up with different numbers. The specific formula would be greatly appreciated! Here are my numbers...
    2015 Subaru WRX Premium 6mt, 36 mo./15k lease, NY, MSRP $30,460, Sale price #28,081, tax $1043 (not sure if correct or how this was figured);
    other fees (are these part of cap cost?) title $10, admin $396, Inspection $30, acquisition, 595.
    I would like to know money factor and residual, and exact calculation of lease payment. Also, how much I need to put down upfront to keep payment at $350/mo. Thank you!!!
  • MichaellMichaell ColoradoPosts: 118,206
    larryo_22 said:

    Can you plz help with my monthly lease payment calculation...the online calculators seem to come up with different numbers. The specific formula would be greatly appreciated! Here are my numbers...
    2015 Subaru WRX Premium 6mt, 36 mo./15k lease, NY, MSRP $30,460, Sale price #28,081, tax $1043 (not sure if correct or how this was figured);
    other fees (are these part of cap cost?) title $10, admin $396, Inspection $30, acquisition, 595.
    I would like to know money factor and residual, and exact calculation of lease payment. Also, how much I need to put down upfront to keep payment at $350/mo. Thank you!!!

    36/15 lease numbers on 2015 WRX Premium 6mt - 58% and .00140

    The article at the top of this discussion explains how to build your own spreadsheet to perform the lease calculations.

    We need to know the net cap cost (sale price + fees and taxes) in order to calculate the payment.

    We do not recommend putting money down on a lease - if the car is stolen or totaled, you lose that money.

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    2015 Subaru Outback 3.6R / 2014 MINI Countryman S ALL4

  • First, my mistake, I meant the MF and residual for 2016, not 2015. I listed all the fees above. Thank you.
  • MichaellMichaell ColoradoPosts: 118,206
    larryo_22 said:

    First, my mistake, I meant the MF and residual for 2016, not 2015. I listed all the fees above. Thank you.

    2016 Subaru WRX Premium 6mt 36/15 - 62% and .00160

    Knowing the fees isn't enough - are you paying them up front or adding them into the sale price?

    Did you get a good deal? Be sure to come back and let us know! Post a pic of your new purchase or lease!


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    2015 Subaru Outback 3.6R / 2014 MINI Countryman S ALL4

  • Have agreed to lease a 2016 Subaru Forester. MSRP: $30,337. We agreed upon a price of $28,000. Residual rate is 61%. Money factor is .001. The term is 36 months. No trade in or cap reduction. All taxes and drive away fees will be paid up front, thus will not be included in the lease. When I calculate the monthly payment, I come up with just over $310. The dealer's system quotes just over $327 and they cannot (will not?) detail their numbers. Where's the discrepancy, any ideas?
  • MichaellMichaell ColoradoPosts: 118,206

    Have agreed to lease a 2016 Subaru Forester. MSRP: $30,337. We agreed upon a price of $28,000. Residual rate is 61%. Money factor is .001. The term is 36 months. No trade in or cap reduction. All taxes and drive away fees will be paid up front, thus will not be included in the lease. When I calculate the monthly payment, I come up with just over $310. The dealer's system quotes just over $327 and they cannot (will not?) detail their numbers. Where's the discrepancy, any ideas?

    I get $310/mo as well with the numbers you've provided.

    Ask the dealer for the net cap cost - if higher than the agreed upon selling price, ask them what's been added to it.

    Did you get a good deal? Be sure to come back and let us know! Post a pic of your new purchase or lease!


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    2015 Subaru Outback 3.6R / 2014 MINI Countryman S ALL4

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