Lease

autoguy5

Hi, could I please get the MF/Residual value and lease credits for a 2020 Ford Edge Titanium Elite, 10.5k. Zip 55416. Thanks

kyfdx

autoguy5 said:

Hi, could I please get the MF/Residual value and lease credits for a 2020 Ford Edge Titanium Elite, 10.5k. Zip 55416. Thanks

36/10.5

1.00% APR
49%/48% residual for AWD/FWD

$2750 lease cash
$300 dealer cash

autoguy5

I need your help to see if a dealer is being straight with me on a lease. Here's the information on the lease worksheet;
MSRP.............$48,405 (This does not appear on the worksheet)
Market value selling price...$45,605 (what is this & where would they have gotten this from?)
TTL Savings..$ 5,726 (includes rebates and "other things)
ADJUSTED PRICE...$39,879 (This is also the negotiated price and I believe this would be the Cap Cost)

I am now being told that the selling price that the lease is based on is the ADJUSTED PRICE, ($39,879), PLUS ADDING BACK $3,750 of the savings for a whopping $43,629.

Is that true? Are savings added in to the negotiated car price for purposes of determing monthly leases?
Also, I am being told that I cannot pay the tax up front, it has to be figured into the lease. That seems like BS to me...why would I want or be required to pay interest on tax?

Thanks in advance for your help.

kyfdx

autoguy5 said:

I need your help to see if a dealer is being straight with me on a lease. Here's the information on the lease worksheet;
MSRP.............$48,405 (This does not appear on the worksheet)
Market value selling price...$45,605 (what is this & where would they have gotten this from?)
TTL Savings..$ 5,726 (includes rebates and "other things)
ADJUSTED PRICE...$39,879 (This is also the negotiated price and I believe this would be the Cap Cost)

I am now being told that the selling price that the lease is based on is the ADJUSTED PRICE, ($39,879), PLUS ADDING BACK $3,750 of the savings for a whopping $43,629.

Is that true? Are savings added in to the negotiated car price for purposes of determing monthly leases?
Also, I am being told that I cannot pay the tax up front, it has to be figured into the lease. That seems like BS to me...why would I want or be required to pay interest on tax?

Thanks in advance for your help.

Ford often has two MSRPs. One farther up the line, before package discounts, then another one at the bottom, after the package discounts. You need a picture of the window sticker. Most Ford dealers have these on-line.

I'll guess there is a miscommunication on the price + rebates. A screenshot of the deal off the computer would help.

We've always heard that Minnesota tax is collected upfront. No idea why you wouldn't be able to pay it upfront. Again, seems like a miscommunication.

autoguy5

I will send a screenshot. But in the meantime, is it correct to add part of the savings back into the negotiated price to come up with a price that you have to make monthly payments on? If that's the case why even bother to give those savings?

kyfdx

autoguy5 said:

I will send a screenshot. But in the meantime, is it correct to add part of the savings back into the negotiated price to come up with a price that you have to make monthly payments on? If that's the case why even bother to give those savings?

No, and it seems doubtful that is what happened.

autoguy5

Honestly, I'm not making it up...that IS what I was told. I'm a 65 year old lawyer and I wrote down what he said..."have to add the $3,750 rebate, part of the total savings, back into the price." And, I told him I would pay ALL taxes & doc fees uprfront. I'm attaching the worksheet. Appreciate your input.

kyfdx

autoguy5 said:

Honestly, I'm not making it up...that IS what I was told. I'm a 65 year old lawyer and I wrote down what he said..."have to add the $3,750 rebate, part of the total savings, back into the price." And, I told him I would pay ALL taxes & doc fees uprfront. I'm attaching the worksheet. Appreciate your input.

It sure doesn't look like a very good deal.
$2000 upfront and $586/mo. for that vehicle?

And, if your rebates are $3750, then the additional discount is just $1976. (on last year's model).

You might check the window sticker. I'll guess the $48405 is before the package discounts, and the bottom line on the sticker is $45,605.

A copy of the actual lease contract or a screenshot of the lease deal on the computer would clear a lot of things up.

Also, they add all of the taxes and fees up, but then just give you a generic "$2000 cash down". If you want all of that paid upfront, then add it up, plus the first payment, and tell them that's how much you want Due at Signing.

autoguy5

Thanks so much. I just received a copy of the lease agreement and I will attach it and a NEW even crazier work sheet, (down payment even went up),...looks very bad. I'll also send a copy of the window sticker. Please keep in mind that I wanted a $0 cash up front lease, and I would





pay taxes and document fees up front also.

kyfdx

@autoguy5

The selling price you have originally is after rebates have been deducted. To properly account for the rebates on the contract, the selling price before rebates have been deducted is listed, then the rebates are shown separately. This is normal, and they aren't adding your rebates to the price to calculate the lease.

You aren't exactly paying fees, taxes and first payment at signing, but it isn't far off.

Other issues:

Is this a demo/loaner with existing mileage? I notice the total allowed miles is 34,340. Does it already have 4340 miles on it? If so, it seems that has lowered the residual significantly. Also, the difference between the window sticker MSRP and the beginning value on your last document gives pause. How exactly did they determine the residual value?

While the vehicle seems to have been discounted about $4800 before rebates are deducted, the much lower residual than it would be new ($23700 vs. $21900) is killing the lease payment.

The rent charge seems a little high. As though they used 1.50% APR, rather than 1.00% APR (adding about $15/mo. to the payment)

This doesn't seem like a very good deal for a 2020 vehicle with mileage.
The main issue is the residual amount, and the discrepancy of MSRP (possibly related)

autoguy5

First, I really want to thank you for taking the time to analyze this and go through this with me. I really appreciate it. Here are some questions based on your comments in specific paragraphs.

1. Not sure I understand where the numbers from your first paragraph are within the documents.
2. Yes, it is a demo/loaner...before the test drive they did not say it was a demo/loaner, so I didn't notice the mileage. Afterwards, when they gave me the price of $39, 897 they did tell me about the mileage, but I though they said it was only 2,xxx or so miles.
3. Do you have a feeling for what should the residual be?
3. I did say I wanted the 1% rate and I'm sure they did 1.5%
4. I agree, not a good deal...could I ask you to explain a little further what you mean "the main issue is the residual amount, and the discreepancy of the MSRP?

Would it be possible to ask you for your opinion on what you believe would be a fair counter offer on my part?

kyfdx

autoguy5 said:

First, I really want to thank you for taking the time to analyze this and go through this with me. I really appreciate it. Here are some questions based on your comments in specific paragraphs.

1. Not sure I understand where the numbers from your first paragraph are within the documents.
2. Yes, it is a demo/loaner...before the test drive they did not say it was a demo/loaner, so I didn't notice the mileage. Afterwards, when they gave me the price of $39, 897 they did tell me about the mileage, but I though they said it was only 2,xxx or so miles.
3. Do you have a feeling for what should the residual be?
3. I did say I wanted the 1% rate and I'm sure they did 1.5%
4. I agree, not a good deal...could I ask you to explain a little further what you mean "the main issue is the residual amount, and the discreepancy of the MSRP?

Would it be possible to ask you for your opinion on what you believe would be a fair counter offer on my part?

1) All of that info is in the first two documents

3) $23718 (49% of MSRP) minus $$0.20/mile for the 4340 miles ($868) = $22850. Their residual on the 2nd document is $21901. There may be a different way to calculate the residual on a loaner, but if it is different, it equals a bad deal for you.

4) Two different MSRPs listed.. one on the window sticker, and a second one on your last document.
Residual should be 49% of MSRP, less an adjustment for the current mileage, but the residual listed seems to be a lot lower than that.

With the amount of money you have upfront, I would want to be under $500/mo.

autoguy5

Once again, thank you for your help and patience!! I believe I am understanding...
Here are what I hope are my last questions/clarifications:

1. Could you please clarify the "two different MSRPs listed...one on the window sticker, and the second one on your last document." Do you mean $48,405, (window sticker), vs $45,605 listed as the Market Value Selling price on the the dealers worksheet?

2. Am I correct that the MSRP for residual purposes should be based on the $48,405?

3. On page 2 of the lease, #19, it says the agreed value of the car is $43,629, then it adds in the following: tax ($1,455.87), acuisition fee ($645) for a total TOTAL GROSS CAPITALIZED COST OF $45,729.
A. Can't I pay the tax & acquisition fee upfront?...I believe I read I could...
B. Once again I'm confused. As stated above, on page 2 of the lease, #19, it says the agreed value of the car is $43,629. I thought the agreed upon value of the vehicle was our "negotiated" price of, $39,879, (which reflects the discount and the $3,750 rebate). If the value IS $43,629, that just adds the $3,750 rebate back into the total gross capitalized cost. This doesn't seem to be any advantage to me the rebate does me no good if it's added back in. Is what they are doing correct and proper?

4. I totally agree, the amount they are asking for upfront is nuts...and did NOT plan on paying any amont upfront other than taxes, acquisition fee and other fees related to registration.

5. Summing up, in your opinion, would these be correct:
MSRP should be: $48,405;
Cap Cost should be; $39,879 (I'm paying tax etc)
Interest rate should be: 1% (per Ford's new program)
They need to take off more for the demo miles
The residual should be at least: $23,718 (49% of MSRP plus $0.20/mile for 4,340 miles
$0.00 buydown
Pay $2,951 upfront for tax, doc fee and all other

6. Assuming the above is correct, (or close), what is your opinion on what you believe would be a fair counter offer on my part?

kyfdx

autoguy5 said:

Once again, thank you for your help and patience!! I believe I am understanding...
Here are what I hope are my last questions/clarifications:

1. Could you please clarify the "two different MSRPs listed...one on the window sticker, and the second one on your last document." Do you mean $48,405, (window sticker), vs $45,605 listed as the Market Value Selling price on the the dealers worksheet?

2. Am I correct that the MSRP for residual purposes should be based on the $48,405?

3. On page 2 of the lease, #19, it says the agreed value of the car is $43,629, then it adds in the following: tax ($1,455.87), acuisition fee ($645) for a total TOTAL GROSS CAPITALIZED COST OF $45,729.
A. Can't I pay the tax & acquisition fee upfront?...I believe I read I could...
B. Once again I'm confused. As stated above, on page 2 of the lease, #19, it says the agreed value of the car is $43,629. I thought the agreed upon value of the vehicle was our "negotiated" price of, $39,879, (which reflects the discount and the $3,750 rebate). If the value IS $43,629, that just adds the $3,750 rebate back into the total gross capitalized cost. This doesn't seem to be any advantage to me the rebate does me no good if it's added back in. Is what they are doing correct and proper?

4. I totally agree, the amount they are asking for upfront is nuts...and did NOT plan on paying any amont upfront other than taxes, acquisition fee and other fees related to registration.

5. Summing up, in your opinion, would these be correct:
MSRP should be: $48,405;
Cap Cost should be; $39,879 (I'm paying tax etc)
Interest rate should be: 1% (per Ford's new program)
They need to take off more for the demo miles
The residual should be at least: $23,718 (49% of MSRP plus $0.20/mile for 4,340 miles
$0.00 buydown
Pay $2,951 upfront for tax, doc fee and all other

6. Assuming the above is correct, (or close), what is your opinion on what you believe would be a fair counter offer on my part?

1) Yes
2) Yes
3B) The agreed value on the doc doesn't account for the rebates. If you look farther down the doc, you'll see the rebates are subtracted from that amount
3A) Everything goes into the Gross CAP. Your upfront money isn't really allocated. If you want more paid upfront, to achieve the purpose of paying taxes and acquisition fee upfront, just ask them to re-do it with more upfront.
4) You've misunderstood me. The only amount you are paying upfront is $2407 (this is on the first document). that is less than the total of tax, fees and first payment.

5)
MSRP - yes

CAP Cost- No, their Adjusted CAP cost is correct, given the numbers provided

Interest- Yes, it should be 1%. My rough calculations put it at 1.5%

Yes... you need a bigger discount, due to it being a demo

Residual - No, $23718 is the base residual. The residual goes down for demo miles, not up. But, the residual they are using seems awfully low.

Upfront - Structure it however you want it. Add up everything you want to pay upfront, and tell them that amount.