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How to Calculate Monthly Lease Payments



  • kyfdxkyfdx Posts: 72,986
    NJ collects the tax upfront...

    If you wish your bank to pay the tax and then add the amount to your capitalized cost, then you will certainly pay finance charges on that amount...

    NJ doesn't care.... they always get it upfront...


    Prices Paid, Lease Questions, SUVs

  • bwaabwaa Posts: 13
  • NJ does not charge interest on the tax if it's not paid upfront because they're not the entity that funds the lease. It's the fund provider that charges interest on the tax if it's not paid upfront because the tax is financed (capitalized) in the lease. NJ does not finance leases. Banks and manufacturer finance subsidiaries (e.g., American Honda Finance, etc.) finance leases.

  • qbrozenqbrozen Posts: 22,845
    edited February 2013
    I didn't actually mean the state of NJ. I meant in NJ. I am well aware NJ isn't charging interest like a lender.

    '17 F150 Crew 2.7; '67 Coronet R/T; '14 Town&Country Limited; '09 LR2 HSE. 44-car history and counting!

  • sepi60sepi60 Posts: 13
    edited March 2013
    Hello everyone:

    So, I'm trying to practice my calculations before going to the dealer today, but something doesn't add up. For the lease special offered at:

    with MSRP of $38,345, $725 Acquisition fee, $750 loyalty rebate, and $3,624 first month (including $2500 down, $725 acq. fee and $399 first month payment), I get monthly payments of $412 (pretax and excluding license and reg), when I use 0.0013 for money factor and 0.6 residual factor for 10,000 miles per year. (these are the values currently offered by BMW financials).

    Here is my calculations:
    Net Cap Cost = 38345 (MSRP) + 725 (acq. fee) - 2500 (down payment) - 725 (acq. fee paid upfront) - 750 (loyalty rebate) = 35095

    Month depreciation = (35095-23007)/36 = 336
    Interest = (35095+23007)*.0013 = 76

    Total = 336+76 = 412

    The only way that I can $399 seems to be if I include first month payment in "cap cost reductions", to bring the net cap cost down to $34696, which reduces the monthly depreciation to
    $325 and the finance charge to $75 (total ~$400). But including first month payment in the "cap cost reduction" doesn't make sense to me. If I do that, should I then divide the total depreciation by 35 instead of 36 (since one month is already paid)?

    Am I missing something?

    Thanks much
  • kyfdxkyfdx Posts: 72,986
    What you are missing is the selling price of the vehicle... You aren't going to pay MSRP, are you?

    There is an unspecified dealer discount in the advertisement...


    Prices Paid, Lease Questions, SUVs

  • sepi60sepi60 Posts: 13
    Thanks kyfdx.

    No, in reality I will negotiate and get (hopefully) a much better price than MSRP. I was just trying to practice to get the numbers posted on their website right.

    So, there's a hidden discount somewhere. That makes much more sense.
  • melech37melech37 Posts: 18
    I was planning on leasing a Volkswagen CC probably next month, But when I look at the very substantial incentives ($3500) available in April I'm feeling some pressure to do it now. I'm concerned that VW may not extend the incentive into May.
    Does anyone know what rationale the car makers use in keeping or pulling incentives from month to month? Is there any public source that can accurately estimate the next months deals?

  • Kirstie_HKirstie_H Posts: 11,042
    Here's our VW CC Lease Questions discussion:

    However, there is NO source that can tell you what next month's incentives will be. These aren't published anywhere because they would influence buying patterns, and also, because sometimes incentives are based on previous months' sales.


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  • jsas1981jsas1981 Posts: 7

    Have a few questions on the sales tax on a lease quote I received for a 2013 Pathfinder Platinum Premium - 3 year/36K . I will list my details below but the total sales tax the dealer calculated on their lease worksheet came out higher then my calc. I am leasing in NJ.

    MSRP: 44,645
    Cap Cost : 41,000
    Acq Cost : 595
    Rebate: 675
    Adj Cap Cost 40,920
    Residual: 54%
    Money Factor: .00056

    The total sales tax that the lease worksheet I have is $1,351.20. I am coming in a little less then that if I base my tax calculation off of the total amount that I am technically "borrowing" which would be 16,811.70. Let me know if you have any insight on this topic.

  • delta737hdelta737h Posts: 606
    Greetings isas1981!

    Yes, I do have some insight on the way taxes are computed in NJ as it is done the same way in Ohio. What I need to know is your NJ sales tax rate.

  • jsas1981jsas1981 Posts: 7
    Hi delta737h,

    The tax rate in NJ is 7%
  • delta737hdelta737h Posts: 606

    Something is missing. Did you capitalize the first payment and/or tax into the lease? If you email me the dealer worksheet, I'll be able to see exactly what's going on with this lease.

  • jsas1981jsas1981 Posts: 7
    John - Send me your email address and ill scan it over to you.

  • delta737hdelta737h Posts: 606
    Here's my email...

  • drt222drt222 Posts: 9
    Hi everybody,

    Thanks for sharing the knowledge.

    Here's the offer I have:

    Cap cost:28872
    MSRP: 33160
    Purchase option: 16266.80
    Residula: 48%

    They didn't give me the MF but they came up with a monthly lease payment of 399 with $0 down and 1st month free for a 39 month lease period.

    Is that a good deal?
  • Kirstie_HKirstie_H Posts: 11,042
    Hi - this discussion is for more general questions about leasing, and calculating the lease payment itself. For info on what specifically constitutes a good deal on a particular vehicle, you're better off posting in a discussion about that vehicle: VW CC Lease Questions


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  • donuts3donuts3 Posts: 3
    Hi. Am looking at leasing for the first time ever. I have some interesting (good?) money factors , ranging from .0013 and .0016 for various crossovers (i haven't decided which one I like - OUtback, Santa Fe, CX5, Sorento), and residual values from about 59 - 63%. I am looking for 36 - 42 mo, 10K - 12K mi, and $0 down. Some of the monthly payments are around $350. I really would like to get this down closer to $300. is the only number I can push on the Sale price of the car, without having to put money down? I thought that money factor was unable to budge, but a friend just suggested it may be.

    Also - is it common/uncommon/advisable or not to ask for service contract to be thrown in?

  • steverstever Posts: 52,683
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  • I would like to trade in my car in and lease a new car. New job, less money, better benefits. I do still owe money on the car but have about 13-14k equity in the car. Would like to use a little of the money towards a new car lease and pocket rest of the money so I can supplement my income. I know that you get less for trading in vs. selling privately, but to add the tax to the trade-in amount to see if it is worth it just to sell privately.

    Question is, for the amount of money I will receive for my trade-in, the tax on the amount will far surpass the amount of taxes on the lease. What happens with the excess taxes? Applied to the lease? Or will I loose it? Thanx!
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