Lease deal on 2017 C300 coupe
05-31-2016, 06:36 PM
#51
Senior Member
Thread Starter
Mike, I'm going to get back to you tomorrow as it will take my cluttered mind a little while to try to figure out (understand) just what the alternatives are. Then, I hope to be able to ask intelligent questions to see if I really know what's happening.
BTW, DK, letting me know that my present leasing negotiations suck, truthful as it may be, doesn't help my frame of mind. I've got the money, but what holds me up on the deal is that I don't like to be taken. For a new hot car like the C300 coupe with no known incentives (well, maybe $500) and will have to be factory ordered, what kind of figures do you think I should be aiming for?
BTW, DK, letting me know that my present leasing negotiations suck, truthful as it may be, doesn't help my frame of mind. I've got the money, but what holds me up on the deal is that I don't like to be taken. For a new hot car like the C300 coupe with no known incentives (well, maybe $500) and will have to be factory ordered, what kind of figures do you think I should be aiming for?
05-31-2016, 07:04 PM
#52
MBWorld Fanatic!
I lease and I purchase depending on the car and my situation. The new cars I bought for my kids as Graduation gifts I buy since they're theirs to keep. My wife's Audi I leased since she loaded it up and I wanted to keep the payment under $1k. I haven't found that one is superior to the other in every circumstance. I leased my C300
On your deal, I think you're fine except for being charged twice for the acquisition fee. Once that's sorted out, go lock the build and pay a deposit. I make the deposit equal to due at signing so the car is paid for when I go pick it up. If not, make sure to account for it somewhere in the spreadsheet.
On your deal, I think you're fine except for being charged twice for the acquisition fee. Once that's sorted out, go lock the build and pay a deposit. I make the deposit equal to due at signing so the car is paid for when I go pick it up. If not, make sure to account for it somewhere in the spreadsheet.
05-31-2016, 09:20 PM
#53
Mike, I'm going to get back to you tomorrow as it will take my cluttered mind a little while to try to figure out (understand) just what the alternatives are. Then, I hope to be able to ask intelligent questions to see if I really know what's happening.
BTW, DK, letting me know that my present leasing negotiations suck, truthful as it may be, doesn't help my frame of mind. I've got the money, but what holds me up on the deal is that I don't like to be taken. For a new hot car like the C300 coupe with no known incentives (well, maybe $500) and will have to be factory ordered, what kind of figures do you think I should be aiming for?
BTW, DK, letting me know that my present leasing negotiations suck, truthful as it may be, doesn't help my frame of mind. I've got the money, but what holds me up on the deal is that I don't like to be taken. For a new hot car like the C300 coupe with no known incentives (well, maybe $500) and will have to be factory ordered, what kind of figures do you think I should be aiming for?
05-31-2016, 09:39 PM
#54
MBWorld Fanatic!
Yeah, if interest rates weren't so low I'd be more interested in doing MSD. I'd rather have the use of the cash than an even lower interest rate. But if you don't mind tying up the cash it's a smart play. Kind of like buying a 3 year CD.
If you decide to do multiple security deposits, the only change on the spreadsheet is to the Money Factor.
If you decide to do multiple security deposits, the only change on the spreadsheet is to the Money Factor.
05-31-2016, 11:40 PM
#55
Junior Member
Mike, I'm going to get back to you tomorrow as it will take my cluttered mind a little while to try to figure out (understand) just what the alternatives are. Then, I hope to be able to ask intelligent questions to see if I really know what's happening.
BTW, DK, letting me know that my present leasing negotiations suck, truthful as it may be, doesn't help my frame of mind. I've got the money, but what holds me up on the deal is that I don't like to be taken. For a new hot car like the C300 coupe with no known incentives (well, maybe $500) and will have to be factory ordered, what kind of figures do you think I should be aiming for?
BTW, DK, letting me know that my present leasing negotiations suck, truthful as it may be, doesn't help my frame of mind. I've got the money, but what holds me up on the deal is that I don't like to be taken. For a new hot car like the C300 coupe with no known incentives (well, maybe $500) and will have to be factory ordered, what kind of figures do you think I should be aiming for?
C450. Even before VW was exposed for fraud they had some of the best "variance" cost I have ever seen. My point is that the mileage allotment with that high variance doesn't sound good. Give a guy 10,000 for hell sakes! If you can live with it then do it. I made the point that Mike is giving you good info to work with. If you can live with it then enjoy the car. I have loved my C400. (Not leased)
06-01-2016, 03:40 PM
#56
Senior Member
Thread Starter
He's either inexperienced or a crook. You can put that fee in up top and make it part of the capitalized cost (which adds to the lease payment) or you can pay it as an upfront cost and pay it as due at signing, never both. He can't double dip the fee as profit. Funny that it took them a week to figure out how to respond without acknowledging that they padded the first offer.
We don't need him to "honor" the $635 figure necessarily. We need him to explain where he's getting his numbers from in the first place so we can duplicate the calculations and confirm them.
If he's insisting it has go into capitalized costs put it there and back it out of due at signing.
Over the phone, this is what he said I should do on the spreadsheet. At the time I didn't understand what he was saying ("back it out",) but now I think I do: He wants me to put the acquisition fee into the lease calculation and then not pay $795 as part of the upfront money...yes/no? Now I ask, can he legally insist that I put the $795 into cap if I'm willing to pay at signing? Even though the $795 will not be due at signing, isn't he illegally forcing me to pay interest on it? So why should I be "fine with moving the $795 into cap" as this will increase my monthly payment from $616/mo to $641/mo...an added cost of $23076-$22176=$900 over 36 months? Why can't I push him to go for $616 with $1760 due at signing?
First months rent and tax goes up with the extra $795 to $641.32
Moving it from due at signing to part of the cap costs puts the due at signing at $990.32, which is first months rent and tax of $641.32 plus the $349 dealer fee.
(If he's okay with putting the payment at $635 with $990 due at signing, great. I guarantee he's not. Just taking the extra $795 in profit and moving it around.)
Doing it this way, the $795 in placed into the cap, but removed from due at signing...yes/no? But on your spreadsheet, this incurs a monthly payment of $641 and not $635. Isn't someone loosing money here?
If you look at the monthly payment variance it's now going in your favor, with a $227 credit over the life of the loan. But...
$795 extra fee
-227 less in payments
-----
$568 in extra profit
This $568 extra profit goes to the dealer...yes/no?
So bottom line is that you are suggesting that, overall, my best deal is give him $568 extra profit...extra profit over what?..., $990 at signing and payments of $641/mo.? And that this is to my advantage if he won't go for not placing the $795 within the lease?
My response would be:
Dear Dealer,
Thank you for your counter offer. It does appear we're getting close, however MBFS is entitled to only one $795 acquisition fee. I'm fine moving the $795 from due at signing to the cap costs. However I would not be interested in paying it twice.
Attached please find my revised offer, reflecting the fee as part of the cap cost and removed from cash due at signing. It results in a monthly rent and tax of $641 and a total of $990 cash to close.
Presuming these changes are acceptable, I look forward to closing the deal.
Leave the cash for your trade out of it. The value of it didn't change based on whatever lease deal you end up putting together.
We don't need him to "honor" the $635 figure necessarily. We need him to explain where he's getting his numbers from in the first place so we can duplicate the calculations and confirm them.
If he's insisting it has go into capitalized costs put it there and back it out of due at signing.
Over the phone, this is what he said I should do on the spreadsheet. At the time I didn't understand what he was saying ("back it out",) but now I think I do: He wants me to put the acquisition fee into the lease calculation and then not pay $795 as part of the upfront money...yes/no? Now I ask, can he legally insist that I put the $795 into cap if I'm willing to pay at signing? Even though the $795 will not be due at signing, isn't he illegally forcing me to pay interest on it? So why should I be "fine with moving the $795 into cap" as this will increase my monthly payment from $616/mo to $641/mo...an added cost of $23076-$22176=$900 over 36 months? Why can't I push him to go for $616 with $1760 due at signing?
First months rent and tax goes up with the extra $795 to $641.32
Moving it from due at signing to part of the cap costs puts the due at signing at $990.32, which is first months rent and tax of $641.32 plus the $349 dealer fee.
(If he's okay with putting the payment at $635 with $990 due at signing, great. I guarantee he's not. Just taking the extra $795 in profit and moving it around.)
Doing it this way, the $795 in placed into the cap, but removed from due at signing...yes/no? But on your spreadsheet, this incurs a monthly payment of $641 and not $635. Isn't someone loosing money here?
If you look at the monthly payment variance it's now going in your favor, with a $227 credit over the life of the loan. But...
$795 extra fee
-227 less in payments
-----
$568 in extra profit
This $568 extra profit goes to the dealer...yes/no?
So bottom line is that you are suggesting that, overall, my best deal is give him $568 extra profit...extra profit over what?..., $990 at signing and payments of $641/mo.? And that this is to my advantage if he won't go for not placing the $795 within the lease?
My response would be:
Dear Dealer,
Thank you for your counter offer. It does appear we're getting close, however MBFS is entitled to only one $795 acquisition fee. I'm fine moving the $795 from due at signing to the cap costs. However I would not be interested in paying it twice.
Attached please find my revised offer, reflecting the fee as part of the cap cost and removed from cash due at signing. It results in a monthly rent and tax of $641 and a total of $990 cash to close.
Presuming these changes are acceptable, I look forward to closing the deal.
Leave the cash for your trade out of it. The value of it didn't change based on whatever lease deal you end up putting together.
06-01-2016, 05:05 PM
#57
MBWorld Fanatic!
No, you're just paying interest on that $795 if it's up in the capitalized cost that you wouldn't otherwise pay interest on. That $795 is reflected in the payment.
Honestly I don't see what difference it makes to the dealer where it goes. If you really want to pay it upfront just put it there and send the spreadsheet as an offer.
Honestly I don't see what difference it makes to the dealer where it goes. If you really want to pay it upfront just put it there and send the spreadsheet as an offer.
06-01-2016, 07:17 PM
#58
Senior Member
Thread Starter
I think this is it as I think I've got an understanding (in my own way which needs verification to see if I am correct.) Let me put down how I have thought things out based on whether or not the $795 acquisition fee is paid up front or entered into the lease payments. The figures are taken directly from your spreadsheets with the acquisition fee IN LEASE and NOT IN LEASE:
IN LEASE
Total lease cost = $23,087.52
At Signing = $349.00 (1st month payment already in total lease cost only
have to pay Dealer Fee)
Total =$23,436.52
NOT IN LEASE
Total lease cost =$22,208.11
At signing =$795 + $349=$1144 (1st month payment in Total Lease Cost,
have to pay up front Acqusition and Dealer Fees)
Total =$23,352.11
The difference between the two payment menthods is:
$23,436.52 - $23,352.11 = $84.41
So, if correct, it really won't matter much which way I go???
IN LEASE
Total lease cost = $23,087.52
At Signing = $349.00 (1st month payment already in total lease cost only
have to pay Dealer Fee)
Total =$23,436.52
NOT IN LEASE
Total lease cost =$22,208.11
At signing =$795 + $349=$1144 (1st month payment in Total Lease Cost,
have to pay up front Acqusition and Dealer Fees)
Total =$23,352.11
The difference between the two payment menthods is:
$23,436.52 - $23,352.11 = $84.41
So, if correct, it really won't matter much which way I go???
06-01-2016, 08:42 PM
#59
MBWorld Fanatic!
However you do it, your spreadsheet has to agree with the dealers numbers. The only two values you need to watch are the monthly lease payment, and the cash due at signing. As long as you and the dealer agree on those two numbers, you're good to go. Those two numbers are the only way for the dealer to get you to pay more than what you agreed to.
06-02-2016, 08:00 AM
#60
Senior Member
Thread Starter
However you do it, your spreadsheet has to agree with the dealers numbers. The only two values you need to watch are the monthly lease payment, and the cash due at signing. As long as you and the dealer agree on those two numbers, you're good to go. Those two numbers are the only way for the dealer to get you to pay more than what you agreed to.
06-02-2016, 12:08 PM
#62
Senior Member
Thread Starter
06-02-2016, 03:28 PM
#64
Senior Member
Thread Starter
Hold everything. I just spoke with my local MB dealer (different place than I have been working with.) He's the first guy I went to to test drive the car, but didn't initiate any sale discussion. During that first visit, out of the blue he offered me $2000 off msrp ($50,160-$2000=$48,160,) but I never pursued that offer any further. Talking to him now, I started by asking how much off for my factory ordered car and he immediately said $4500, which I thought was pretty good and I then started asking questions about leasing fees.
The MB dealerships fees were quite a bit higher than in my present negotiation; here's a comparison:
Acquisition fee
MB dealer.....$1095
Present dealer...$795
Document(Dealer fee)
MB dealer.....$700
Present deal...$349
Money Factor
MB dealer....0.00151 (Claimed that they up it by 30 basis points, but also said that
he'd up the discount to $5000. Also note that that figure may
or may not change by the time car is ready for delivery)
Present deal...0.00121 (Guy said he'd hold that rate when car ready for delivery)
Residual is the same for both...60% for 3 year, 7500 miles/year.
All due at signing fees can be paid upfront.
Using the same methodology as I used in post #58, I have come up with a saving of $1338 when compared to present deal when having the $795 rolled into lease and a saving of $1253 when not rolled into lease (MB dealer's Lease cost total + acqu fee + dealer fee = Total cost of leasing....$20304 + $1095 + $700 = $22099, monthly payment of $564 already accounted for in the Lease Cost Total).
The only other major difference between these two deals is that the present deal will hold the residual and the MF at 60% and MF at 0.00121 to time of delivery whereas the MB dealer won't. So, the roughly $1300 less with the MB dealer may or may not hold when car is delivered in approximately two months. This new fly in the ointment, now makes me wonder just how far I can push my present deal to meet or better the MB deal. Attached are two spreadsheets showing the figures.
BTW, MB offered me $8000 for my 2005 Z4, whereas the present deal offered me $9000. I'd use this money to pay off the monthlies.
Present Deal
C300 Flycaster-3.xls
MB Deal
MB Deal.xls
The MB dealerships fees were quite a bit higher than in my present negotiation; here's a comparison:
Acquisition fee
MB dealer.....$1095
Present dealer...$795
Document(Dealer fee)
MB dealer.....$700
Present deal...$349
Money Factor
MB dealer....0.00151 (Claimed that they up it by 30 basis points, but also said that
he'd up the discount to $5000. Also note that that figure may
or may not change by the time car is ready for delivery)
Present deal...0.00121 (Guy said he'd hold that rate when car ready for delivery)
Residual is the same for both...60% for 3 year, 7500 miles/year.
All due at signing fees can be paid upfront.
Using the same methodology as I used in post #58, I have come up with a saving of $1338 when compared to present deal when having the $795 rolled into lease and a saving of $1253 when not rolled into lease (MB dealer's Lease cost total + acqu fee + dealer fee = Total cost of leasing....$20304 + $1095 + $700 = $22099, monthly payment of $564 already accounted for in the Lease Cost Total).
The only other major difference between these two deals is that the present deal will hold the residual and the MF at 60% and MF at 0.00121 to time of delivery whereas the MB dealer won't. So, the roughly $1300 less with the MB dealer may or may not hold when car is delivered in approximately two months. This new fly in the ointment, now makes me wonder just how far I can push my present deal to meet or better the MB deal. Attached are two spreadsheets showing the figures.
BTW, MB offered me $8000 for my 2005 Z4, whereas the present deal offered me $9000. I'd use this money to pay off the monthlies.
Present Deal
C300 Flycaster-3.xls
MB Deal
MB Deal.xls
06-02-2016, 03:30 PM
#65
MBWorld Fanatic!
You could buy it. But it would break my cardinal rule to never again own a Benz out of warranty, especially one I'm still paying for. If you're your own mechanic, and you typically keep your cars a long time, it's an option.
On the other hand if you want to date a car rather than marry it, you typically trade every three years or so, and you can live with the mileage limits, it's nice to drive a brand new car with full warranty protection and walk away after a couple a years.
On the other hand if you want to date a car rather than marry it, you typically trade every three years or so, and you can live with the mileage limits, it's nice to drive a brand new car with full warranty protection and walk away after a couple a years.
06-02-2016, 03:47 PM
#66
Junior Member
I assume the lease will be held with MB? Did they pull your credit and pre-approve or has this all been hypothetical based on your understanding of your credit? MB will most likely have the best lease options BUT, it is worth asking if any other lender has a better lease option. They rarely (almost never on new) will but the question might alert the dealer that you have a deeper knowledge of what they do in the finance office. If you wanted to ask a particular question it would be; "Might" any other lenders offer a stronger residual value for this car?
When I purchased mine I asked the dealer how many points she was making on my financing. She answered quickly and correctly so I let her keep it.
When I purchased mine I asked the dealer how many points she was making on my financing. She answered quickly and correctly so I let her keep it.
06-02-2016, 03:56 PM
#67
MBWorld Fanatic!
I'm pretty sure MBFS is it for leases on new MB. Rates are so low now I don't know that I'd spend the time to hunt down an extra half or quarter on the rate.
On the money factor, I've never paid a mark up. I'm fine with the dealer making a profit, but it has to come from the margin on the car I'm buying, plus the mandatory Dealer Fee. I usually don't wait for the dealer to tell me the MF. I'll find it myself and just ask them to confirm it.
On the money factor, I've never paid a mark up. I'm fine with the dealer making a profit, but it has to come from the margin on the car I'm buying, plus the mandatory Dealer Fee. I usually don't wait for the dealer to tell me the MF. I'll find it myself and just ask them to confirm it.
06-02-2016, 04:00 PM
#68
MBWorld Fanatic!
Originally Posted by flycaster
Hold everything. I just spoke with my local MB dealer (different place than I have been working with.) He's the first guy I went to to test drive the car, but didn't initiate any sale discussion. During that first visit, out of the blue he offered me $2000 off msrp ($50,160-$2000=$48,160,) but I never pursued that offer any further. Talking to him now, I started by asking how much off for my factory ordered car and he immediately said $4500, which I thought was pretty good and I then started asking questions about leasing fees.
The MB dealerships fees were quite a bit higher than in my present negotiation; here's a comparison:
Acquisition fee
MB dealer.....$1095
Present dealer...$795
Document(Dealer fee)
MB dealer.....$700
Present deal...$349
Money Factor
MB dealer....0.00151 (Claimed that they up it by 30 basis points, but also said that
he'd up the discount to $5000. Also note that that figure may
or may not change by the time car is ready for delivery)
Present deal...0.00121 (Guy said he'd hold that rate when car ready for delivery)
Residual is the same for both...60% for 3 year, 7500 miles/year.
All due at signing fees can be paid upfront.
Using the same methodology as I used in post #58, I have come up with a saving of $1338 when compared to present deal when having the $795 rolled into lease and a saving of $1253 when not rolled into lease (MB dealer's Lease cost total + acqu fee + dealer fee = Total cost of leasing....$20304 + $1095 + $700 = $22099, monthly payment of $564 already accounted for in the Lease Cost Total).
The only other major difference between these two deals is that the present deal will hold the residual and the MF at 60% and MF at 0.00121 to time of delivery whereas the MB dealer won't. So, the roughly $1300 less with the MB dealer may or may not hold when car is delivered in approximately two months. This new fly in the ointment, now makes me wonder just how far I can push my present deal to meet or better the MB deal. Attached are two spreadsheets showing the figures.
BTW, MB offered me $8000 for my 2005 Z4, whereas the present deal offered me $9000. I'd use this money to pay off the monthlies.
Present Deal
Attachment 332447
MB Deal
Attachment 332448
The MB dealerships fees were quite a bit higher than in my present negotiation; here's a comparison:
Acquisition fee
MB dealer.....$1095
Present dealer...$795
Document(Dealer fee)
MB dealer.....$700
Present deal...$349
Money Factor
MB dealer....0.00151 (Claimed that they up it by 30 basis points, but also said that
he'd up the discount to $5000. Also note that that figure may
or may not change by the time car is ready for delivery)
Present deal...0.00121 (Guy said he'd hold that rate when car ready for delivery)
Residual is the same for both...60% for 3 year, 7500 miles/year.
All due at signing fees can be paid upfront.
Using the same methodology as I used in post #58, I have come up with a saving of $1338 when compared to present deal when having the $795 rolled into lease and a saving of $1253 when not rolled into lease (MB dealer's Lease cost total + acqu fee + dealer fee = Total cost of leasing....$20304 + $1095 + $700 = $22099, monthly payment of $564 already accounted for in the Lease Cost Total).
The only other major difference between these two deals is that the present deal will hold the residual and the MF at 60% and MF at 0.00121 to time of delivery whereas the MB dealer won't. So, the roughly $1300 less with the MB dealer may or may not hold when car is delivered in approximately two months. This new fly in the ointment, now makes me wonder just how far I can push my present deal to meet or better the MB deal. Attached are two spreadsheets showing the figures.
BTW, MB offered me $8000 for my 2005 Z4, whereas the present deal offered me $9000. I'd use this money to pay off the monthlies.
Present Deal
Attachment 332447
MB Deal
Attachment 332448
On the new deal SS, replace that $635 value in the Variance section with whatever monthly payment they quote you.
Last edited by Mike5215; 06-02-2016 at 04:03 PM.
06-02-2016, 05:48 PM
#69
Senior Member
Thread Starter
Yeah, I always like math... And, yes, I am using the SS to model to check the differences. Also, the MF mark-up is a bummer. I've modeled a 25 and a 50 basis points mark up and that would mean ~$20-40/mo increase in monthlies.
Did what you suggested ($641 vs $564,) and came out with a -$2784 in my favor. But if MF goes up at time of car lease, this difference gets decreases by $720-$1440/36 months. I would love to negotiate the MF...
Did what you suggested ($641 vs $564,) and came out with a -$2784 in my favor. But if MF goes up at time of car lease, this difference gets decreases by $720-$1440/36 months. I would love to negotiate the MF...
06-02-2016, 05:50 PM
#70
Senior Member
Thread Starter
I assume the lease will be held with MB? Did they pull your credit and pre-approve or has this all been hypothetical based on your understanding of your credit? MB will most likely have the best lease options BUT, it is worth asking if any other lender has a better lease option. They rarely (almost never on new) will but the question might alert the dealer that you have a deeper knowledge of what they do in the finance office. If you wanted to ask a particular question it would be; "Might" any other lenders offer a stronger residual value for this car?
When I purchased mine I asked the dealer how many points she was making on my financing. She answered quickly and correctly so I let her keep it.
When I purchased mine I asked the dealer how many points she was making on my financing. She answered quickly and correctly so I let her keep it.
06-02-2016, 05:59 PM
#71
Senior Member
Thread Starter
Hey Mike, my son is going to lease a car and I sent him the SS. He thinks he found an error. Could you check this out:
"Good talking to you yesterday. I played around with the calculation and think I found an error in row #32, the “Finance or Rent Charge.”
The formula to determine this is:
=(Net_Cap_Cost+Residual_Value)*Money_Factor*Lease_ Term
But I think it should be:
=(Net_Cap_Cost-Residual_Value)*Money_Factor*Lease_Term
It makes sense to me that you should subtract the residual from the Net Cap Cost before multiplying by the money factor and lease term. It is currently set up to add the Net Cap Cost and residual. This inflates the values by a lot. Let me know what you think. Anyway, when I run the numbers, to get something for $150/month with a minimal down payment, it only gets me a ~$15K car."
"Good talking to you yesterday. I played around with the calculation and think I found an error in row #32, the “Finance or Rent Charge.”
The formula to determine this is:
=(Net_Cap_Cost+Residual_Value)*Money_Factor*Lease_ Term
But I think it should be:
=(Net_Cap_Cost-Residual_Value)*Money_Factor*Lease_Term
It makes sense to me that you should subtract the residual from the Net Cap Cost before multiplying by the money factor and lease term. It is currently set up to add the Net Cap Cost and residual. This inflates the values by a lot. Let me know what you think. Anyway, when I run the numbers, to get something for $150/month with a minimal down payment, it only gets me a ~$15K car."
06-02-2016, 06:52 PM
#72
MBWorld Fanatic!
Originally Posted by flycaster
Yeah, I always like math... And, yes, I am using the SS to model to check the differences. Also, the MF mark-up is a bummer. I've modeled a 25 and a 50 basis points mark up and that would mean ~$20-40/mo increase in monthlies.
Did what you suggested ($641 vs $564,) and came out with a -$2784 in my favor. But if MF goes up at time of car lease, this difference gets decreases by $720-$1440/36 months. I would love to negotiate the MF...
Did what you suggested ($641 vs $564,) and came out with a -$2784 in my favor. But if MF goes up at time of car lease, this difference gets decreases by $720-$1440/36 months. I would love to negotiate the MF...
MBFS will occasionally sweeten lease deals by manipulating residual and MF to make payments more attractive. It may actually be more favorable when you take possession of the car.
06-03-2016, 08:19 AM
#73
Senior Member
Thread Starter
Mike have you had a chance to check out whether or not my son is correct in that the SS may have an error? See Post #71.
EDIT: Sorry, Mike, for my son's wishful thinking. I Googled the question and, indeed, your formula is correct.
EDIT: Sorry, Mike, for my son's wishful thinking. I Googled the question and, indeed, your formula is correct.
Last edited by flycaster; 06-03-2016 at 09:58 AM.
06-03-2016, 10:10 AM
#74
MBWorld Fanatic!
Yeah, that's a common misunderstanding.
Here's an explanation from LeaseGuide.com:
Calculating Finance Fee
"The finance fee portion of your monthly lease payment is like interest on a loan and pays the leasing company for the use of their money. It’s calculated as follows:
Finance Fee = ( Net Cap Cost + Residual ) × Money Factor
Yes, you add Net Cap Cost and Residual — this is not a mistake. It’s not double-counting as it may appear. It’s simply a way of calculating the average amount financed without using complicated constant-yield annuity business formulas. This is the method used by all lease companies and dealers.
Also be aware that you’re paying finance charges on both the depreciation and residual (the total of which is the negotiated selling price of the car). Remember, you’re tying up the leasing company’s money while you’re driving their car. They used their money to buy the car that you will drive while you lease. Technically, you’re paying finance charges on half of the depreciation (the average value) and all of the residual value for the term of the lease."
Be careful not to change any formulas as it may produce erroneous results elsewhere in the spreadsheet.
Here's an explanation from LeaseGuide.com:
Calculating Finance Fee
"The finance fee portion of your monthly lease payment is like interest on a loan and pays the leasing company for the use of their money. It’s calculated as follows:
Finance Fee = ( Net Cap Cost + Residual ) × Money Factor
Yes, you add Net Cap Cost and Residual — this is not a mistake. It’s not double-counting as it may appear. It’s simply a way of calculating the average amount financed without using complicated constant-yield annuity business formulas. This is the method used by all lease companies and dealers.
Also be aware that you’re paying finance charges on both the depreciation and residual (the total of which is the negotiated selling price of the car). Remember, you’re tying up the leasing company’s money while you’re driving their car. They used their money to buy the car that you will drive while you lease. Technically, you’re paying finance charges on half of the depreciation (the average value) and all of the residual value for the term of the lease."
Be careful not to change any formulas as it may produce erroneous results elsewhere in the spreadsheet.
06-04-2016, 09:01 AM
#75
Senior Member
Thread Starter
Well, guys, my leasing education is really paying off. I've started shopping around and have gotten down to a $5000 discount (10%) and a monthly payment of $564 at another dealer. However, their acquisition and dealer fees are about $800 more than my original deal which was only $1100. And furthermore, the new dealer does mark up their MF by 30 basis points, so I'm looking at 0.00121 vs 0.00151. Nonetheless, I'm now at $564 vs $617 in monthlies. I haven't gone back to the first guy as I don't think he'll be able to match this new deal as he is getting his cars from dealers...and that should cost profit dollars if he gives up more money to match my new dealer's deal.
This afternoon, I'm going to another MB dealer who doesn't add to the MBFS money factor. They also charge acqui and dealer fees as heavily as my new dealer does. But if I can get them to give me a $5000 discount with the lower MF of 0.00121, this would lower the monthlies to $540.
One of my concerns is that interest rates may increase by the time the car is ready for delivery (probably some time at the end of August if I order now). But, then again, the economy is not performing as well as expected and car sales are off, so there is a good chance the rates won't go up until maybe December...In any event, off to the races.
This afternoon, I'm going to another MB dealer who doesn't add to the MBFS money factor. They also charge acqui and dealer fees as heavily as my new dealer does. But if I can get them to give me a $5000 discount with the lower MF of 0.00121, this would lower the monthlies to $540.
One of my concerns is that interest rates may increase by the time the car is ready for delivery (probably some time at the end of August if I order now). But, then again, the economy is not performing as well as expected and car sales are off, so there is a good chance the rates won't go up until maybe December...In any event, off to the races.
