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Originally posted by ISBlain:

Residuals will be announced just prior to vehicle arrival...I will post a "typical" lease scanario when I get the residuals...that way everyone can see how the car leases out. ( my guess is around 425.00 per month) We'll see..

well let's see this now.

monthly Lease fee ={( Purchase price- [MSRP x Residual %] then plus 1.5% cap costs)* Money factor> / months}

so example

MSRP = $34.5K

Purchase price = $33.5K

Residual is based on average cars in this price range of

1 Year = 67% 2Years = 62% 3 Years = 60% ect

The your money factor is an average about 7~9% ( most people that want this car have good credit ratings )

so in a 3 year situation ={( $33.5- [ $34.5 x .60]+517 )* 7.5%(*3)> / 36}= $432

Now that is if you pay for the Reg and other upfront costs and add ons.

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'00 Civic Si

'99 BMW M3

[This message has been edited by BatuKing (edited June 12, 2000).]

Lease payment is calculated as follows:

Base Depreciation Payment + Monthly Interest Payment = Total Monthly Payment (NO Tax Included, it will vary by state)

Example with a 60% residual and 8.04% interest ( 0.0804)

Base Depreciation Payment formula is:

(Sale Price - Residual Value)

---------------------------- = Deprec. Pay

Term

Monthly Interest Formula is:

(Sale Price + Residual)

----------------------- x APR (ex 0.0804)

2

------------------------------------------

12

Depreciation is simply the difference between what the car is worth now and at the end, divide by the term and that is your base monthly depreciation payment.

Basically, the interest formula is as follows, you add the selling price to residual and divide by two to arrive at the average daily balance, then multiply that by your yearly percentage rate (in decimal, NOT percentage form), that will give you your yearly interest, then divide by 12 to arrive at monthly interest payment. For a car that lists and sells for $34,253 with a residual of $20,551.80 (i.e. 60%)with an interest rate of 8.04% (0.0804), your payment would come to:

$380.61 Base Depreciation

+$183.59 Monthly Interest Payment

=$564.20 Total Monthly Payment

(NO TAXES INCLUDED)

The shorthand formula for the interest calculation is:

(Sale Price + Residual) x money factor

The money factor is the apr in decimal form divided by 24 (using your 9th grade algebraic formula's to get the fractions out of the equation) 8.04% translates to a money factor of .00335 (0.0804/24), if you do the formula either way, the payment comes out the same, the money factor is just a whole lot shorter. The thing to remember is that you are being charged interest on the whole value of the vehicle being leased ($34,253) not just the depreciation ($13702), because the bank must write the dealer a check for the full amount of the car, the bank is then out $34k and are going to charge interest on the lost opportunity, so if you lease or finance a car for 3 years at the same interest rate, you will pay more interest on the lease because the average daily balance on the lease is higher than on the loan because you are amortizing the lease to only $20,551 and the loan to $0. However, you will be paying about 2x the payment on the loan. On a lease you are trading higher interest (in actual $$ value) for greater cash flow (lower payments)....

Just my $0.02

dave

regards,

dave

24 Months = $545

36 Months = $460

48 Months = $425

these figures inc Monthly Sales Tax.

and at 10K Miles per year. (I never trade in a car at the end of a lease so who cares about miles)

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'00 Civic Si

'99 BMW M3

[This message has been edited by BatuKing (edited June 13, 2000).]

Mine is Navy Federal Credit Union, they give out the highest residual values (since residuals are determined my credit results)

they are the same rate even if you have a BK.

------------------

'00 Civic Si

'99 BMW M3

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