Lease Cash Explained?

mjdaugh

What is lease cash? Thanks

kyfdx

mjdaugh said:

What is lease cash? Thanks

On a Hyundai, it's a consumer incentive.

mjdaugh

Does it reduce the cap cost? Is it something that would show up on the sales contract? I guess what I'm trying to figure out is how would I know that I'm getting the $4,000 lease cash on the Elantra sport? Thanks.

kyfdx

mjdaugh said:

Does it reduce the cap cost? Is it something that would show up on the sales contract? I guess what I'm trying to figure out is how would I know that I'm getting the $4,000 lease cash on the Elantra sport? Thanks.

Yes, it should be on the contract as a CAP reduction.

But, factory-to-dealer incentives won't show up. That should just result in a lower selling price.

evrevolution

I am using an Excel spreadsheet that calculates leases, and it does not currently have either a "Lease Cash" or "Customer Incentive". I am using this to help buy a Chevy Volt, where both Lease Cash and Customer Incentive are key attributes of any lease. How do I model these concepts in the spreadsheet?

The spreadsheet has a section that is for "Capitalized Cost Reductions". Do both Lease Cash and Customer Incentive represent reductions of the capitalized cost? If not, where do they go in the calculation, generally speaking?

Assuming the car you want to buy qualifies for the $7500 federal tax credit, and the financing arm of the car company is willing to give you 50% of this, where do you model that in the lease calculation? Does this become an additional capitalized cost reduction?

For a Chevy Volt, is the federal tax credit being given through either the Lease Cash or Customer Incentive?

Michaell

evrevolution said:

I am using an Excel spreadsheet that calculates leases, and it does not currently have either a "Lease Cash" or "Customer Incentive". I am using this to help buy a Chevy Volt, where both Lease Cash and Customer Incentive are key attributes of any lease. How do I model these concepts in the spreadsheet?

The spreadsheet has a section that is for "Capitalized Cost Reductions". Do both Lease Cash and Customer Incentive represent reductions of the capitalized cost? If not, where do they go in the calculation, generally speaking?

Assuming the car you want to buy qualifies for the $7500 federal tax credit, and the financing arm of the car company is willing to give you 50% of this, where do you model that in the lease calculation? Does this become an additional capitalized cost reduction?

For a Chevy Volt, is the federal tax credit being given through either the Lease Cash or Customer Incentive?

The "lease cash" is a dealer incentive, which will result in a lower selling price.

The "customer incentive" is like a rebate, and is applied like a down payment (known as a cap cost reduction in lease-speak)

When you lease, the bank gets the federal tax credit. The bank may decide to share it with you as an incentive, or (possibly) with a higher residual.

evrevolution

Michaell said:

The "lease cash" is a dealer incentive, which will result in a lower selling price.

The "customer incentive" is like a rebate, and is applied like a down payment (known as a cap cost reduction in lease-speak)

When you lease, the bank gets the federal tax credit. The bank may decide to share it with you as an incentive, or (possibly) with a higher residual.

How will I see "Lease Cash" on my leasing proposal? Will this be embedded into the dealer's offer price to me, so in effect, I never see it as a line item at all?

Regarding "Customer Incentive" will this appear in the list of Capital Cost Reductions as a line item? Is there any other phrase that might be used here instead of "Customer Incentive"? Maybe this is labeled as "Customer Rebate" or "Incentive Rebate" or other similar terms?

Hiding the partial return of a tax credit in the residual value is very sneaky. If they do share it as an incentive, would it be itemized as a Capital Cost Reduction?

kyfdx

evrevolution said:

Michaell said:

The "lease cash" is a dealer incentive, which will result in a lower selling price.

The "customer incentive" is like a rebate, and is applied like a down payment (known as a cap cost reduction in lease-speak)

When you lease, the bank gets the federal tax credit. The bank may decide to share it with you as an incentive, or (possibly) with a higher residual.

How will I see "Lease Cash" on my leasing proposal? Will this be embedded into the dealer's offer price to me, so in effect, I never see it as a line item at all?

Regarding "Customer Incentive" will this appear in the list of Capital Cost Reductions as a line item? Is there any other phrase that might be used here instead of "Customer Incentive"? Maybe this is labeled as "Customer Rebate" or "Incentive Rebate" or other similar terms?

Hiding the partial return of a tax credit in the residual value is very sneaky. If they do share it as an incentive, would it be itemized as a Capital Cost Reduction?

If it's a factory-to-dealer incentive, you won't see it in your deal. It will just be part of the selling price.
If it's a factory-to-customer incentive, then it will be listed as a CAP cost reduction.

There is no tax credit for you on a lease. Just work with the numbers you have.

DuizzleMyNizzle

How does knowing the lease cash help me negotiate a deal?

Michaell

DuizzleMyNizzle said:

How does knowing the lease cash help me negotiate a deal?

For Hyundai, it's a consumer incentive that works like a down payment, on top of any discount you negotiate.

johnedmunds

Michaell said:

DuizzleMyNizzle said:

How does knowing the lease cash help me negotiate a deal?

For Hyundai, it's a consumer incentive that works like a down payment, on top of any discount you negotiate.

Same for VW?

Michaell

johnedmunds said:

Michaell said:

DuizzleMyNizzle said:

How does knowing the lease cash help me negotiate a deal?

For Hyundai, it's a consumer incentive that works like a down payment, on top of any discount you negotiate.

Same for VW?

VW is a factory to dealer incentive, and will result in a lower selling price. Dealer not required to disclose; it's up to you to determining be the best price.

LIcardriver

How does lease cash work for Kia?

thanks!

Michaell

LIcardriver said:

How does lease cash work for Kia?

thanks!

Customer incentive, works like a down payment.

erand881

Does lease cash work like down payment with Buick/GMC?

Michaell

erand881 said:

Does lease cash work like down payment with Buick/GMC?

Yes

Gideon

Does lease cash work like a down payment with Audi financial? Audi also offers a dealer market allowance. How does that affect my sale price offer? If they offer a 1K allowance does that make my 35K offer actually 36K on the paper work, for example? Thanks

kyfdx

Gideon said:

Does lease cash work like a down payment with Audi financial? Audi also offers a dealer market allowance. How does that affect my sale price offer? If they offer a 1K allowance does that make my 35K offer actually 36K on the paper work, for example? Thanks

Yes, Audi lease cash is a customer incentive, applied as a CAP cost reduction

The dealer market allowance is money to the dealer, which should hopefully result in you negotiating a lower selling price. But, that's it. You don't see it in the paperwork.

wespt1922

How is lease cash handled on a mazda?

Michaell

wespt1922 said:

How is lease cash handled on a mazda?

It's a customer incentive, treated like a down payment.

hondakid000

How does Lexus lease cash work as far as where would I find it in the lease. Is this something the dealer offers or the manufacturer? And lexus cash would be used toward the selling price?

hondakid000

hondakid000 said:

How does Lexus lease cash work as far as where would I find it in the lease. Is this something the dealer offers or the manufacturer? And lexus cash would be used toward the selling price?

And can I use lease cash as a down payment?

Michaell

hondakid000 said:

hondakid000 said:

How does Lexus lease cash work as far as where would I find it in the lease. Is this something the dealer offers or the manufacturer? And lexus cash would be used toward the selling price?

And can I use lease cash as a down payment?

Lexus lease cash is a customer incentive, and is applied like a down payment on the paperwork.

Abhi12

For Ford, how do they work? Are they a customer incentive taken off the sale price that works like a down payment?

Michaell

Abhi12 said:

For Ford, how do they work? Are they a customer incentive taken off the sale price that works like a down payment?

That is correct.