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wrong math, buddy.
Quote:
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Originally Posted by chris24
I'm looking at a lease on an '07 4.8i and I'm being quoted around $1039/month on a 30 month, 15k miles per year lease with sales tax paid up front and no down payment (other than required bank fees, security deposit, etc...). The MSRP of my spec-ed out 4.8i is $71,120, and I'm being told that lease price is after a $2500 discount off the MSRP, and that the car is residualized at 63%.
If I'm doing this correctly, that means the finance rate for the lease is about 23% based on the following math:
$71,120 - 2500 = 68,620
$68,620 * .37 = 25,389
payment of $1039 = (25,389 * (1 + Rate) / 30
total payments of $31,170 = 25,398 * (1 + Rate)
31,170/25,398 = 1.23, rate therefore = 23%, which seems very, very high to me. I'm not sure if I'm calculating this correctly or if some of the information I have is off.....
Can anyone tell me what lease rates in the US they're seeing, or if I'm missing something here? Trying to figure out if I'm really getting the discounts I'm being told I am, and just trying to understand how lease calculations are done...
Thanks!
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Payment of $1,039 mo means you are paying $31,170 over 30 months for the car. $25,389 is depreciation and $5,781 is interest. This interest is over 30 months which means $192.70 per month. Now, the car will be worth $43,231 at the end of 30 months.
Here's the proper formula to calculate interest rate payment on a lease.
( Sale price $68,620 + PRICE AT END OF LEASE $43,231 ) * money factor = Monthly Interest $192.70.
Hence money factor in your case is .00172.
Now, here's how money factor is calculated.
Interest Rate / 2400 = money factor (.00172)
This means your ANNUAL interest rate is 4.13% (which is prob. 4 1/8)
congrats, it's not bad.
__________________
2011 X5 3.5D - Platinum Gray / Black Leather / Dark Bamboo, Sports w/ 20's, Adaptive Drive, Comfort Seats, Cold Weather, Premium, Sound, Rear Climate, Technology, Comfort Access, Auto High Beams, Heated Rear Seats, Running Boards, Roof Rails w/Rola Crossbars, Space-saver Tire, Moonroof visor, P/Q Brake Pads, Cargo Mat, Weathertech All Weather Mats, Draw-Tite Hitch.
2010 X5 4.8i - Lemon'd 12/2010.
2006 X5 4.4i - Sold 11/2009.
2004 X5 4.4i - Stolen 8/2005. R.I.P.
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