Shouldn't Gross Cap Cost be different from Net Cap Cost?

[Deleted User]

Hi @kyfdx

I am looking to lease a M440 Gran Coupe and asked the dealer for MSRP -3% +$500 loyalty.
They agreed but their best offer (which came in an image format) looks wrong and is different from what any lease calculator would return as monthly payment.

First thing that catches the eye is Net Cap Cost being the same as the Gross Cap Cost when it shouldn't. The dealer said "The Gross Cap and Net Cap is correct as it is automated in the Reynolds and Reynolds Desking software" but I don't buy it.

Do you think they're doctoring the format in order to actually end up at the MSRP for this deal and offset the 3% discount or there is something legit in the offer that escapes my attention?
The lease calculator run with the same conditions shows a monthly payment of $927 w/o tax , $1027 incl. tax.

I appreciate if you could shed some light on this for me, thanks a bunch,
remeeno

kyfdx

@remeeno

In this example, items that are paid upfront out of the working cash aren't added into the Gross CAP. The reason: You live in a monthly tax state, and non-taxable items are paid upfront, so that they don't become taxable. If added into the Gross CAP, part of the working cash would become CAP cost reduction, and that would be taxed upfront.

The upfront charges include the license fee and doc fee. The rest of the $2691 is the first payment, and likely upfront sales tax on the rebate. Nothing leftover for CAP reduction, ergo the net and gross CAP are the same.

You can see the check-marked items in the left-hand column aren't added to the Gross CAP, but paid out of the working cash. They never enter the Gross/Net CAP equation.