Lease Newbie - help in understanding lease quote of 2019 CR-V

LivAngelica

Hi,

In the process of getting our first car, and looking to lease a CR-V. I did my share of research in learning the terminology and how a lease is constructed, but still have trouble breaking down the numbers on an quote I received. Anyone that can clarify a couple of items for me on the quote i received for an EX trim?


MSPR: $29 695 (incl destination charge)
Cap Cost: $27 939 + $595 acquisition fee
MF: 0.00140
Residual: 61%
10K

Monthly payment: $341

Due at singing
Cap cost reduction: $220 (should i deduct this from cap cost?, before calculating monthly depreciation cost? this is essentially a down payment?)
First months payment: $341
Reg/fees: $333
Sales tax: $1107 (I'm in NJ, but dealer is in NY. what value am I being taxed on? I don't understand what variables in the lease the tax is the based on.)

The terms mentions he acquisition fee is paid over 36 months. But it's also mentioned being part of the cap cost. I'm not sure where in my calculation this cost should be added? Include as part of cap cost, or divided in the end as added cost per month?

I know how to make calculations using MF and Residual value. But not clear on my adjusted cap cost here, and at what stage I should add fees in to make my calculations accurate.

Any help is greatly appreciated!

Michaell

LivAngelica said:

Hi,

In the process of getting our first car, and looking to lease a CR-V. I did my share of research in learning the terminology and how a lease is constructed, but still have trouble breaking down the numbers on an quote I received. Anyone that can clarify a couple of items for me on the quote i received for an EX trim?


MSPR: $29 695 (incl destination charge)
Cap Cost: $27 939 + $595 acquisition fee
MF: 0.00140
Residual: 61%
10K

Monthly payment: $341

Due at singing
Cap cost reduction: $220 (should i deduct this from cap cost?, before calculating monthly depreciation cost? this is essentially a down payment?)
First months payment: $341
Reg/fees: $333
Sales tax: $1107 (I'm in NJ, but dealer is in NY. what value am I being taxed on? I don't understand what variables in the lease the tax is the based on.)

The terms mentions he acquisition fee is paid over 36 months. But it's also mentioned being part of the cap cost. I'm not sure where in my calculation this cost should be added? Include as part of cap cost, or divided in the end as added cost per month?

I know how to make calculations using MF and Residual value. But not clear on my adjusted cap cost here, and at what stage I should add fees in to make my calculations accurate.

Any help is greatly appreciated!

I confirm .00140 and 61% for 36/10

We don't recommend a cap cost - it is a down payment, and not really necessary for a lease.

Sales tax, in both NJ and NY, is based on the sum of the payments, and is collected up front. Do you know what sales tax rate is being used, and from which state? Would hate for you to have the sales tax go to NY, then have NJ ask for their taxes when you go to register the car.

As the acquisition fee is being added into the cap cost (which we recommend, BTW), it becomes part of the monthly payment.

Ask the dealer for any information that you find unclear.

At the moment, I'm getting a payment slightly higher than your quote ($348 vs. $341) with the prices given (and, adding the acq fee to the price)

LivAngelica

Thanks! Would you mind breaking down how you calculate? I get a much higher monthly cost ($355). Must be something off in my math.

Monthly depreciation: ($27 939 + $595 acquisition fee) - (residual value of $18113.9) / 36 = 289.4458333
Monthly Money Factor charge: ($27 939 + $595 acquisition fee + residual value of $18113.9) * 0.00140 = 65.30713

Total monthly: 354.7529633
So tax, should be added to the total monthly payments of $ 12 771. I'll naturally make sure to clarify taxes, if we decide to move forward with this dealer.

How come dealers quote is lower than these costs? Don't they want to ensure they make this as a minimum to make a profit? I would have to pay a higher payout at end of lease? Or is it that they have leverage because of invoice price and therefore can wiggle the numbers?

Thanks for your help!

kyfdx

LivAngelica said:

Thanks! Would you mind breaking down how you calculate? I get a much higher monthly cost ($355). Must be something off in my math.

Monthly depreciation: ($27 939 + $595 acquisition fee) - (residual value of $18113.9) / 36 = 289.4458333
Monthly Money Factor charge: ($27 939 + $595 acquisition fee + residual value of $18113.9) * 0.00140 = 65.30713

Total monthly: 354.7529633
So tax, should be added to the total monthly payments of $ 12 771. I'll naturally make sure to clarify taxes, if we decide to move forward with this dealer.

How come dealers quote is lower than these costs? Don't they want to ensure they make this as a minimum to make a profit? I would have to pay a higher payout at end of lease? Or is it that they have leverage because of invoice price and therefore can wiggle the numbers?

Thanks for your help!

Yes, add the $595 acq. fee to the CAP cost, then deduct the CAP reduction listed. (yes, essentially a down payment)

Your calculations were correct, as far as they went.

Why is the dealer's quote less than the $349/mo? I don't know. There is a number that is not exactly what's been given, because it's just math.

Residuals cannot be altered. The dealer has to use the residual that the bank provides.

If you live in NJ, you pay NJ tax. If you don't want to pay it upfront, then add it into the CAP cost, and recalculate the payment.

LivAngelica

Thank you for your help!