RonDawg said:The concept of leasing is simple: you are paying only for the expected depreciation of the car, and a bit of interest on top of that. That's why lease payments are usually less than the monthly payments of a purchase. The terminology:
1.) Capitalized Cost: this is what the leasing company/bank (called the "lessor") buys the car from the dealership for. This price is very much negotiable, no different than you negotiating the price of a car you intend to buy.
2.) Capitalized Cost Reduction: leasing's equivalent of a down payment. This includes any cash from you, any net equity from a trade-in, plus any cash contributed by the deal by the manufacturer and/or the dealer. In the case of EV's and PHEV's, if the manufacturer elects to pass on any Federal tax incentives to the consumer ("lessee"), and not all do (but Nissan does if you use their own financing arm, NMAC), this is where it will end up. This part is also negotiable, and aside from manufacturer/dealer contribution, with a lease try to keep this as low as possible. The reason for that is if the car becomes a total loss, you basically will lose any cash you contribute.
3.) Residual Value: this is the expected depreciation of the car. It's a bit of fortune-telling, since nobody can truly predict a car's desirability 2 or 3 years later, but the lessors have developed their own formula based on their previous experience with the brand and/or model. Generally, this is not negotiable.
What you are paying for is the difference between 1, and 2 and 3 combined. The interest on that payment is known as the "Money Factor." To find out what the equivalent APR is on the Money Factor, multiply it by 2400.
Being a Californian, keep in mind that Sacramento expects you to pay them twice on your lease: each monthly payment is subject to sales tax based on the zip code where the car is registered (not necessarily where it is bought) and you are expected to pay the same sales tax rate on the Capitalized Cost Reduction as well.
RonDawg said:Correction: the Residual Value is the expected depreciated price of the car, not the actual expected depreciation (loss of value).
RonDawg said:Being a Californian, keep in mind that Sacramento expects you to pay them twice on your lease: each monthly payment is subject to sales tax based on the zip code where the car is registered (not necessarily where it is bought) and you are expected to pay the same sales tax rate on the Capitalized Cost Reduction as well.
Buy Tax on 28375 *.0875 = $2483
Lease:
Tax on 8150 rebate at drive off 713.13
Tax on 36 monthly 683.64
Tax IF you buy at end on residual 1089.20
Total tax = 2485.97
jvleaf said:Why do people keep implying some evil double tax in CA. My math says it works out to be the same ?
RonDawg said:Many folks have gotten 24 month leases for ridiculously low amounts of money, though with supply getting tight that may not be possible right now.
I personally would not lease a car for 48 months in particular something like an EV where the technology is constantly evolving, and in the case of the Leaf due to battery degradation concerns. You'll no longer be covered by the bumper-to-bumper warranty for the last year/12k miles and you'll only have the powertrain and battery warranties. So if the dash display or the nav system goes berzerk during that last year, you're on the hook for a replacement.
z0ner said:I plan on picking an SV up tonight from a SoCal dealer. Let me know what you think:
State : CA
Sales tax % : 8
Leaf Trim, options : 2013 SV with LED/QC, PREMIUM and FLR MATS
MSRP : 34,670
Invoice : 32,267
Negotiated Price : 31,839 inc 850 dest/handling
Taxes, Title, Registration : ?
Any other fees (doc, administrative, marketing etc) : unknown
Money Factor : .00014
Downpayment : 1000 (loyalty cash)
Monthly payment : 294.26 plus tax
The dealer was telling me it was 1600 under invoice, but if dest/handling is factored in then it only looks like $428, right?
294.26 + 8% = 317.80. Am I missing anything? It looks like I have more room to negotiate.
Enter your email address to join: