01-23-2015, 12:39 PM | #1 |
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Help me understand all the factors for a lease
All right I did my own re-search but I still don't know understand a bit of the math.
Assuming a 43k Final price: MF: .0013 Residual: 60% Then I do: 43000 x .40 = 17200 17200 / 39 payments ~ 441 MF is .0013 x 2400 = 3.12 From my understanding the 3.12 becomes the APR that I will be paying? Then I can just plug into a loan calculator as: Loan amount 17200. Month: 39 interest rate: 3.12 Calculator gives me: ~464 Therefore, the difference is 23 dollars monthly(in this scenario) from no taxes to taxes. Does the MSDs serve to lower those 23 dollars? To this I need to add Taxes do you usually recommend just paying the taxes up front or monthly. I a min WA so I have ~ 9% tax. Did I misunderstood anything? Thanks in advance Tona |
01-23-2015, 04:26 PM | #2 |
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You need four numbers (I picked nice round numbers for illustration):
- net price - $45000 - residual price - $30000 (or MSRP and percentage to calculate it - MSRP $50000 * 60% = $30000) - money factor - 0.0013 - length - 39 months You lease payment is sum of - depreciation, i.e. difference between net price and residual, per month ($45000 - $30000) / 39 = $384.62 - Lease charge, i.e. interest on financed amount. Financed amount is net price. Money factor is a simplified (but confusing) representation of the interest rate used for lease calculations. ($45000 + $30000) * 0.0013 = $97.50 Total Payment $496.58 If you pay tax upfront, it will be added to net price. If you decide to add tax to the payment, it will be $496.58 * 0.09 = $43.39 MSD will lower you money factor, and as a result you monthly payment. 7 MSDs will result in MF 0.00081, and lease charge $60.75. Total including tax will be $485.45, you save $40/month. |
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01-23-2015, 05:09 PM | #3 |
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All right so with my calculations it comes up as:
Assuming a MSRP of 45,000 Net paid 43,000 residual price: 45000*.60 = 27000 Depreciation = 43000 - 27000 = 16000 Payment(without tax and interest) = 16000 / 39 = 410 Lease charge = 43000+27000 = 70,000 * .0013 = 91 Total payment = 410 + 91 = 501 Payment with tax 501 * 1.09 = 546 Lease charge with MDS= 54.7 savings of $34.3 34.3 * 39 = 1337 savings for 3500 in MDS. |
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01-25-2015, 11:09 AM | #4 |
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