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Car_man
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Prices Paid: Buying & Leasing Experiences Forum
The residual value for an otherwise identical lease with 15,000 miles per year would be 2% higher.
You can look up this car's dealer invoice price over in the New Vehicle Pricing section of Edmunds.com.
Car_man
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Prices Paid: Buying & Leasing Experiences Forum
Car_man
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Prices Paid: Buying & Leasing Experiences Forum
Car_man
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Prices Paid: Buying & Leasing Experiences Forum
$220 per month with NJ 7% sales tax included
$1000 out of pocket expenses includes 1st month payment, and all fees.
What do you think? Can I do better?
YES!...You can do much better! Unless NJ sales tax laws have changed, NJ computes sales tax on the depreciated amount which is difference between the Taxable Gross and the Residual Value (see below). The taxable gross is the selling price plus all taxable items that are capitalized in the lease (i.e., rolled into the lease). Unlike NY, I don't believe that NJ computes tax on tax. Therefore, I've excluded the sales tax from the taxable gross. Assuming that NJ still computes tax in this manner and that your credit is EXCELLENT, then you should be able to do no worse than the following...
MSRP.................. 22,565.00
Sell Price........... 18,622.00
AHFC Acq. Fee...... 595.00
Taxable Gross......19,217.00
NJ Sales Tax..... 397.46 = 0.07 x (19,217 - 13,539)
Gross Cap........... 19,614.46
Cap Reduction.... 0.00
Adj. Cap............. 19,614.46
Res. Factor........ 0.60
Residual............ 13,539.00
Money Factor... 0.00127
Term (months). 36
Monthly Payment.. 210.87
Upfront Lease Chg... 125.00 (wild guess)
(title, plates, reg)
Therefore, your monthly payment equates to $210.87 with, say, $125 due at lease signing. Keep in mind that Honda's national lease promo for the Accord LX does not require you to make the first payment. Your only up front fees should be title, registration, and plates which I'm guesstimating to be $125. FYI, here are the details of Honda's lease promo...
2010 Accord Sedan Featured Special Lease - Zero Due at Lease Signing
$0 down payment, $0 security deposit, $0 first month's payment, $0 due at lease signing Excludes taxes, titles and dealer fees. Lease Example with $0 due at lease signing for $250.00 a month for 35 months thereafter. For well-qualified buyers.
Offer valid through: 5/3/2010
FEATURED SPECIAL LEASE: Closed-end lease for 2010 Accord Sedan 5 Speed Automatic LX (Model CP2F3AEW) for $250.00 per month for 36 months with a no capitalized cost reduction available to customers who qualify for the HFS Super Preferred credit tier. Other rates/tiers are available under this offer. $0 due at lease signing ($0 first month's payment and no capitalized cost reduction with no security deposit; total net capitalized cost and base monthly payment does not include tax, license, title, registration, documentation fees, options, insurance and the like). Not all buyers may qualify. $0 due at lease signing offer requires dealer contribution, which could affect final negotiated transaction.
Subject to limited availability.From March 2, 2010 through May 3, 2010, to approved lessees by Honda Financial Services.Closed end lease for 2010 Accord Sedan 5 Speed Automatic LX (Model CP2F3AEW), for well qualified lessees.Not all lessees will qualify.Higher lease rates apply for lessees with lower credit ratings.MSRP $22,565.00 (includes destination).Net capitalized cost $20,961.42. Net capitalized cost includes $595 acquisition fee.Dealer contribution may vary and could affect actual lease payment.Taxes, license, title fees, options and insurance extra.Total monthly payments $8,750.00. Option to purchase at lease end $13,539.00. Lessee responsible for maintenance, excessive wear/tear and 15 cents/mi. over 12000 miles/year for vehicles with MSRP less than $30,000, but for vehicles with MSRP of $30,000 or more, mileage cost is 20 cents/mi. over 12000 miles/year.See dealer for complete details.
Questions? Please let me know.
All the Best,
John
Thanks for your reply and detailed information. I think perhaps that NJ does charge tax upon tax. On the special Honda deal for the Accord at $250 per/m with 0 0 0 0 down, the sales rep told me that the $250 did not include tax (would actually be $267.50). If that is the case, then the $210.87 you arrived at would actually be $225.63. That is pretty crappy to charge tax on top of tax!
As far as fees, in NJ the last several years they make you pay the registration for the 3 years of the lease up front (Approx. $42 X 3 = $126), plus dealer fee is $249.
They quoted me $220, so if you take that extra $5.63 less a month X 36 = $202.68 and add that to the $126 and the $249 it's up to $577.68 out of pocket and $220 per/m. That's pretty close to the $1000 out of pocket $220 per/m unless I am really calculating this all wrong.
Altogether, I have bought 1 Honda and leased 5 all through American Honda Finance. Also they sent me a pre-approved financing letter, so I have to think I am in the Super Preferred credit tier.
What do you think I should aim for as best possible price per month?
Cindy
I was quoted $220 per/mo with $1000 out of pocket on 2010 Accord LX.
Of course the $250 payment in the ad does not include tax. As you know, there is no way that it could as everyone's tax situation is dependent upon the state in which they reside. My $210.87 payment does include NJ sales tax. This payment was computed as follows...
0.00127 x (19,614.46 + 13,539.00) + (19,614.46 - 13,539.00)/36 = 210.87
I simply rolled the NJ sales tax (397.46) into the lease and so the 210.87 payment includes NJ tax. There is language in the following documents
http://www.state.nj.us/treasury/taxation/pdf/pubs/sales/su12.pdf
that states...
"The portion of the lease payment attributable to capitalized sales taxes is not included in the tax base."
This strongly suggests that NJ prohibits the calculation of tax on tax. Also, it appears as though NJ no longer computes sales tax based on the depreciated amount. A few years ago, NJ decided to compute the tax in one of two ways...
(1) On the original purchase price or;
(2) The total of payments
In either case, NJ sales tax is due at lease inception. However, the tax can be financed in the the lease. In that case, the dealer simply pays the sales tax on behalf of the lessee and the fund provider, in turn, reimburses the dealer.
You can examine the following documents for details...
http://www.state.nj.us/treasury/taxation/pdf/pubs/sales/su4.pdf
http://www.state.nj.us/oag/ca/ocp/autogide.pdf
As an example, we'll base the NJ sales on the total of payments (method #2 above) which is exactly the way it's done here in Ohio. The lease proposal would be amended as follows...
MSRP.................. 22,565.00
Sell Price........... 18,622.00
AHFC Acq. Fee...... 595.00
NJ Sales Tax..... 502.29 = 0.07 x 199.32 x 36
Gross Cap........... 19,719.29
Cap Reduction.... 0.00
Adj. Cap............. 19,719.29
Res. Factor........ 0.60
Residual............ 13,539.00
Money Factor... 0.00127
Term (months). 36
Monthly Payment.. 213.91
Taxable Payment.. 199.32
Upfront Lease Chg...
126 (title/reg)
249 dealer fee
17.43 tax on dealer fee
Total Due..... 392.43
I would try to lower the sales price by a few hundred dollars to, say, 18,400. Heck, you may want to roll all of the upfront charges (392.43) into the lease as the cost of money is only about 3%. This would make it a true "sign and drive lease". I know that the above proposal is a "doable" deal.
Keep me posted.
Best,
John
Any feedback is appreciated...this is my third Accord lease and my monthly only went up $18 from the 2007.
Thanks!
Thanks again for your very detailed explanation. I am going to the dealer tomorrow night and I will bring this information with me along with some printouts from Edmunds.
Looking over the paperwork from the car we leased for my daughter last year, it does appear that NJ taxes twice. We paid the sales tax on some portion of the lease and then her monthly payment had tax added to it as well. If this is legal, or just the way things are done (and never caught or questioned) remains to be seen.
Still, I know there is a $1200 dealer incentive with the 2010 Accord LX model. Would it be realistic to subtract that amount from the TMV price I got from Edmunds and expect that to be the sales price negotiated to calculate the lease payments?
TMV in our area is $19,645. Or is it more realistic to aim for half of that amount ($600) subracted from the TMV price?
Hey, John, how did you get your Medina dealer to waive the Ohio doc fee of $250 (maximum allowed by law)? Here in Dayton, OH none of the four dealers I am working will budge from the 250 doc fee. I refuse to pay it but driving 2 hours to Indiana to a reasonable dealer is an unwanted time/gas money expense.
Thanks so much for posting your deal... I also like to make lease proposals in writing to avoid typical dealer BS tactics. I am trying to lease an EX 4cyl this week for 245+16+5=266 per month (base,tax,fees). Seems doable to me but so far no takers below 270...
Subtracting the $1200 from the TMV of 19,645 leaves 18,445 which is very close to the 18,400 I had suggested at the end of my previous post. This is not unreasonable. I'm almost certain that tax on tax in NJ is illegal just as it is in Ohio. However, car dealerships in Ohio are using software that inappropriately computes lease payments and sales tax liability in those instances when the first payment is capitalized or; when both the first payment and sales tax are capitalized. It wouldn't surprise me if NJ was doing the same thing as many NJ dealers use the same software that Ohio dealers use with few differences.
The dealer simply adds the first payment, which captures the amortized tax payment, to the selling price. This is very bad accounting as the sell price is consecrated ground so to speak and should never be altered for any reason. The inflated selling price is used to compute the taxable payment which, in turn, is used to compute the total sales tax liability. Hence, tax levied on tax; which is illegal in states like Ohio and NJ yet perfectly legal in NY. Because the first of N payments is capitalized, the consumer makes only N − 1 payments. Consequently, another concern surfaces when the dealer computes the total sales tax liability based on N payments rather than N − 1 payments. The result is an additional inflated tax which triggers a slightly inflated lease payment meaning the consumer will pay more over the term of the lease. The overcharge is strictly additional tax plus interest accrued thereon and, as a rule of thumb, amounts to about 0.1% of the selling price. For example, if the selling price is $30,000, then the overcharge is about $30.
I spoke with the general manager of a local dealership as well as a major sofware provider and both agreed with my findings. However, nothing has been done about it most likely because the monetary impact is deemed insignificant. Frankly, if I had produced software that inappropriately computes payments and computes tax on tax, I'd be very concerned regardless of the financial impact.
Fortunately, the above is a non-issue with your lease as you are not capitalizing the first payment. If you were to adjust the sell price downward to 18,400.25 (a good idea), your lease proposal would be as follows...
MSRP.................. 22,565.00
Sell Price........... 18,400.25
AHFC Acq. Fee...... 595.00
NJ Sales Tax..... 486.06 = 0.07 x 192.88 x 36
Gross Cap........... 19,481.31
Cap Reduction.... 0.00
Adj. Cap............. 19,481.31
Res. Factor........ 0.60
Residual............ 13,539.00
Money Factor... 0.00127
Term (months)... 36
Monthly Payment.. 207.00 (includes NJ sales tax @7%)
Taxable Payment.. 192.88
Upfront Lease Chg...
126.00 (title/reg)
249.00 (dealer fee)
17.43 (NJ tax on dealer fee @7%)
Total Due..... 392.43
I made the sell price 18,400.25 so that the monthly payment would be an even $207.00. So, you don't have to subtract those pesky decimals in your checkbook.
These numbers are not ball park; they're the real deal. If the dealer agrees to this selling price, they can take these numbers and place them on the AHFC lease agreement.
Should there be any problem with your dealer, I would be happy to intercede on your behalf. A one-page professional-looking lease proposal can save a lot of time, money, and aggravation. Simply create a word document with your letterhead then copy and paste the above proposal and edit as necessary. FAX or email it to your dealer. Is Metro Honda far from you? I know very little about them but have undocumented evidence of some very good deals that have originated from there. You may want to give them a try. If they're too far or, inconvenient, then it's probably not worth the few hundred dollars in savings.
I'm dealing with Rick Rousch Honda in Medina. They claim to have waived the $250 doc fee. However, they may have allowed for it in my selling price which means the sell price is really $250 less or, roughly so. It's the rob Peter to pay Paul principle. Anyway, this is the final deal I got from Rousch...
MSRP.................. 22,565.00
Sell Price........... 18,891.92
AHFC Acq. Fee...... 595.00
Doc Fee.......... 250.00 (yup, I gave 'em the doc fee)
Ohio Sales Tax..... 501.74 = 0.065 x 214.42 x 36
Gross Cap........... 20,238.66
Cap Reduction.... 0.00
Adj. Cap............. 20,238.66
Res. Factor........ 0.60
Residual............ 13,539.00
Money Factor... 0.00127
Term (months)... 36
Monthly Payment.. 229.00 (includes Ohio sales tax @6.5%)
Taxable Payment.. 214.42
Upfront Lease Chg... $80.00 (title, reg., plates)
I'm confident that I could have gotten this vehicle for a few hundred dollars less ($221 payment including tax with $80 paid upfront) but Rousch is very close by and I've never had a problem with them. For me, it's just not worth the effort haggling over a few hundred bucks. Those interested in leasing the LX can definitely get a much better deal. I don't know where you are in Ohio, but those in the Cleveland-Akron area should try Rousch, Pruitt, and Park and start with a sell price of around 18,400 and concede the $250 doc fee, of which, $200 is probably ADP (Additional Dealer Profit). If you go to Rousch, contact Todd Shephard (330-725-3999)... nice guy! Those in the Dayton area, may want to try Voss Honda in Tip City. Those in the Chicago area, should definitely try Schaumburg Honda. They may very well be the largest Midwestern dealership in terms of volume. Several colleagues of mine have gotten awesome deals from them.
To continue, some Ohio dealers will tell you that the $250 doc fee is mandated by the State of Ohio thereby creating a "please don't blame me "snow white" mentality"... that's PURE BS! The only thing the state regulates is the ceiling on dealer doc fees which is currently $250 in Ohio. Not surprisingly, almost every Ohio dealer charges this amount.
You indicated that you're interested in an EX and so I suggest that you visit zag.com and click on "Buy a Car", then, click on overstock.com and enter the required information (vehicle model and your zip code). You'll get some fairly competitive pricing information from nearby dealers. Use that, coupled with incentive and pricing info from other resources (e.g., Edmunds, KBB, etc.), to determine a fair and equitable sell price.
If you haven't already done so, I would recommend that you create a professional-looking one-page lease proposal and then contact the dealer's internet manager. FAX or email it to him/her and they'll be impressed because so many people have no clue whatsoever! Moreover, it's well worth the effort because it will save time, save gobs of money, and save lots of aggravation.
If I can be of further assistance, please let me know.
All the Best,
John
I made a lease proposal as you suggested and did a copy and paste of your numbers above. I printed out two, one with the selling price of $18,622 and one with the $18,400.25. I will bring them with me tomorrow night.
DCH Paramus Honda is the dealer I have leased 5 Honda's through. They currently have 85 Accords on the lot (LX, LX P, and LX S) and 161 EX and EX P's, for a total of 246 Accord sedans.
Thanks for the info about Metro.They are about 30 minutes from me. I checked their inventory and they have a total of 106 LX and EX models, less than half the inventory of Paramus which is a volume dealer. I'll try Paramus first and see what they offer.
I checked several sites on the internet for calculating lease payments, and everyone came up with a different amount for what I plugged in. What program are you using to come up with the calculations that you arrived at? Is this the same one that the dealers are using? Thanks again!
I'm using an excel spreadsheet that I created. As I explained in a previous post; most dealer software programs, except LeaseLink and perhaps a few others, compute payments incorrectly in those instances where the first payment is capitalized. Again, this is an issue that will not impact you. I'm very familiar with dealership software and so I know how they compute payments.
Frankly, I don't trust internet lease payment calculation programs as they use overly simplistic assumptions and seem to be all over the board. For instance, they don't consider those cases where certain items such as sales tax are rolled into the lease. This would require that the program developer know exactly how each state computes sales tax. The program would also have to be flexible enough to compute payments when several items are capitalized in addition to sales tax. These items include, but aren't limited to, multiple security deposits, first payment, and miscellaneous fees. The programmer would also need to know each state's guidelines for what is and what isn't taxable. In NJ, for example, your dealer doc fee ($249) and AHFC's Acq Fee ($595) are taxable items. And so, the taxable payment in my lease proposal includes the $595 fee but excludes the dealer's $249 (plus tax) fee because it's paid upfront. Sales tax, of course, is not included in the taxable payment as sales tax is not a taxable item (NJ, like Ohio, forbids tax on tax). Accordingly, one must first compute the taxable payment in order to determine sales tax liability. Finally, the monthly lease payment of $207.00 is calculated which includes NJ sales tax. And so, the difference between the taxable payment of $192.88 and your monthly payment of $207.00 is strictly sales tax and interest computed thereon.
As a mathematician and actuary, I've tried to develop accurate lease formulas that captures all possible lease scenarios. In short, you can trust my calculations. However, should there be a problem when you visit Paramus, I'll be happy to intercede on your behalf as I've done for so many others in the past that have negotiated leases through other dealerships.
I suggest that you contact Paramus' internet sales manager and FAX/email him or her the $18,400.25 proposal before you visit them in order to secure a commitment one way or the other. This will save you a lot of time, money, and aggravation. It's always nice to have completed all negotiations before visiting the dealership.
Let me know how things go. In the meantime, good luck!
John
Good Luck
If you could post your detailed number and the dealership you are dealing with I would greatly appreciate it.
Thankx
Went to the dealer tonight with the lease proposal and they told me they could not do the deal. Their original offer of $220 with $1000 down turned into $235 month with $484 down (upfront lease charges: $227.50 registration fees, $249 dealer fee and $7.50 tire fee NJ) when I showed them the proposal.
His gross cap amount was $19,784 approx, which was only $300 more than what was on the proposal of selling price at $18,400. I'm not sure how they arrived at their calculations, but it must be the crooked NJ method of calculation. (How could $300 more in the gross cap amount wind up costing $28 more a month in the payment?) Basically told us they would loose $1100 on the deal even with the $1200 dealer incentive.
My son in law came with me and is also looking to negotiate a new lease for my daughter for the same car. He asked for the same deal with a lower price because he only wants 10,000 miles a year instead of the the 12,000 miles and they told him it wouldn't be any less per month for less miles. Does this sound right?
Anyhow, after the manager of the dealership came over to tell us they could not do the deal, we left and said that they just lost 2 leases to people that had already leased 6 cars in total from them.
Now I guess we'll just wait and see if they email or call back or come up with a better deal next week when it's closer to the end of the month. Only risk on my part is that the $1200 dealer incentive ends on April 30th, and I don't know what if any deals there will be next month.
I am going back to the Edmunds site and putting in request quotes from other dealers in this area and see what they respond with.
Is there that much of a difference from dealer prices state to state? I live in Bergen County NJ which is one of the most expensive counties in the nation to live in. Maybe that is why they feel they can get away with higher prices. :sick:
Good luck!
I'm sure it's not the NJ method of calculation. I'd love to see the dealer's lease worksheet, though. A gross cap of 19,784 yields a payment of 215.79 including tax. A payment of $235 is mathematically impossible given a gross cap of 19,784 unless you're buying a heap of additional mileage which would cause the residual to decrease dramatically.
The adjusted cap equals the 19,784 gross cap as there is no cap reduction. So the payment, with tax, should be
0.00127 x (19,784 + 13,539) + (19,784 - 13,539) / 36 = $215.79
which is a long ways south of $235. Their claimed loss of $1,100 is also baloney. Price variance from state to state is likely to be insignificant. Therefore, assuming my dealer's costs are roughly the same as yours, my dealer would be losing about $608 according to your dealer as my sell price ($18,892) exceeds yours ($18,400) by $492. I'm reasonably certain that the probabililty that Rousch Honda in Medina, Ohio lost money on my deal is somewhere between zero and none.
According to zag.com, there are dealers in your area that would be willing to sell for $18,522. I would check with Metro Honda as well as dealers in the Jersey City and Trenton areas if they're reasonably close.
Best of Luck!
John
This is my EX deal on the table with my calculations for those interested. Ohio sales tax is 6.5% and the lease is a standard 12k per year.
msrp 25340; sale price 21714; residual 60%; MF .00127 (money factor)
residual = 60% of 25340 or 15204
cap 1 = sales price - ccr (down payment) = 21714 - 0 = 21714
cap 2 = cap 1 + acq fee = 21714 + 595 = 22309
Pre-tax payment is sum of 2 parts:
1. (cap 2 + residual) * MF = 37513 * .00127 = 47.64
2. (cap 2 - residual) / term = 7105/36 = 197.36
sum = 245.00 (advertised payment from dealer web site)
Ohio requires all lease tax to be paid upfront so unless you are paying it as part of your out-the-door money, it needs to be worked back into the lease (just more math). Cap 2 is increased by the total sales tax amount which is 573.31 (product of 245, 0.065, 36).
Revised cap 2 = 22309 + 573 = 22882
1. (22882 + 15204) * .00127 = 48.37
2. (22882 - 15204) / 36 = 7678/36 = 213.29
new sum = 261.66 (includes the tax; amortized over the 36 month term)
i bumped the 261.66 up to 265 to cover title, reg and slush doc fee. Only one of the three dealers I have contacted will do this deal. I am sleeping on it tonight...
Your calculations are correct but is the 60% residual factor for an EX with 12K correct? It may be a bit lower, perhaps 56%, as the 60% residual may apply to the LX trimline only.
My original calculations used 56% but the numbers did not come out to 245/month pre-tax (the online web deal). I called and they said it was 60% for the EX. Carman said it was 56% several pages ago so i am confused. Some other poster got a deal at 273/month total which is a bit more than my 265 offer. I will get to the bottom of it later today and report back here...
go to truecar.com and find that a price less than ~25k is great
"I just signed a 36/15K 2010 Accord EXL lease for nothing down, $305/month, including taxes"
So far I got one quote and your $305 beats it by $27 per month.
Also I was looking at 12k miles per year. Not 15k
What is funny is. I was quoted $24,000 , But that did not include taxes and fees (bank fee, destination charges)
So the start price was low. To get me excited. Then they start saying this and that is not included. I bet Keys would be extra too. lol Maybe tires lol
So a low lease became very high with tax and fees included.
accord ex-l, year 2010,
MSRP $27,540.00
dealer cash $0.00 / $1,200.00
SELL $24,900.62 / $23,700.62
LEASE TERM 36
RESIDUAL % 0.54
RESIDUAL $14,871.60 / $14,871.60
CCR $0.00 / $0.00
CAP 1 $24,900.62 / $23,700.62
fees $595.00 / $595.00
CAP 2 $25,495.62 / $24,295.62
CAP BASIS $40,367.22 / $39,167.22
money factor 0.001270 / 0.001270
BASE PAY 1 $51.27 / $49.74
CAP 2 - RES. $10,624.02 / $9,424.02
BASE PAY 2 $295.11 / $261.78
monthly $346.38 / $311.52
TAX $810.52 / $728.96
fees w/ tax $1,405.52 / $1,323.96
Cap 2 prime $26,306.14 / $25,024.58
cap basis prime $41,177.74 / $39,896.18
base pay 1 – taxed $52.30 // $50.67
base pay 2 – taxed $317.63 // $282.03
TAXED MONTHLY PAYMENT $369.92 // $332.70
I don't have the 24 month residual % ...
The info i have is 60% for the LX, LX-P, EX all at 12k/year. 15k/year reduces that by 2%. EX-L is at 58% for 12k and 56% for 15k.
Perhaps carman can verify that?
Residual should be 56% for 15k/year on the EX-L
Taxed Monthly payment is 354 at 24900 &
317 at 23700
sorry for my error!
Sale Price: 26,250
36 mo./36,000 mi
$210.00 @ signing
$348 a month for 35 months..Honda makes 1st payment
Same terms except 45,000 miles:
364.mo
Any feedback would be appreciated.
The monthly payments I listed do not include tax.
The $348 with tax: $379 (12k a year)
The $364 with tax: $397 (15k a year)
I believe the destination charge is in the MSRP ($29,815)
Sales Price is $26,250
Purchase option with 12k miles is $16,696.
Feedback is appreciated..
26250 is a great sales price! I think you can do better than 348 though. Pre-tax monthly here for 12k/year is 321 at a very aggressive local dealer. check the link and scroll down to the ex-l v-6:
http://www.vosshonda.com/specials/new.htm
FWIW, I got 337.20 on my lease spreadsheet using money factor of .00127 and your numbers (29815, 26250, 56% residual). What money factor did they use?
I double-checked my lease math and it is still 337.20 for the following data:
msrp 29815, sell 26250, 56% res = 16696.40, cap 2 = 26845, gross cap = 43541.40
mf .00127 Seems to be an extra $400 in their numbers?
I wasn't told interest rate etc....
i need a car bad as my car broke down after 15 years
Thanks Again.....