LEASING A CAR by Brian Langley

Background
Leasing doesn't always make sense but for me it can (for reasons explained below) and I had put an excel calculator together to help me
whenever I was considering buying or leasing a new car. After finding myself often explaining to others over a beer (or two) why I had leased I
thought I would make my calculator a little more user friendly and started sharing with friends.
Reasons why leasing can make sense for me:
- I like to replace my cars every 2-3 years
- The cars I like tend to have good residual values
- I look after my cars whether I buy or lease
- It is not unusual for me to want to add expensive options like navigation systems or sports packages

Some things about leasing that people aren't always aware of:
- In most states you pay tax on the lease payments vs tax on the full cost of the car when purchasing
- When leasing you still negotiate the price just as you would if you were buying. The residual value is calculated of the MSRP but the lease
fees are calculated on the difference between the price you are effectively paying and the residual, so the lower the negotiated price the lower
the monthly lease payments
-With many manufactures the markup on the options are high but it is not uncommon to be able to negotiate invoice for them. This can often
mean that adding options doesn't necessarily have to drive the lease costs through the roof. However when purchasing car options it can be
like the house market where the option doesn't really add value to the car it just makes it more desirable.

Things you need to know before going to the dealer

- The MSRP and Invoice cost of the car you are looking at (both easily found on sites such as Edmunds - See "useful sites" page)
- What others are currently paying for the car you are interested in. This can vary by region but searching some of the sites on the "useful
sites" tab will normally give you an indication of what others are paying (normally multiple dealers in you area will mean more competition and
more favorable deals). Normally deals the others are getting are represented by how close to invoice value purchasers can get. Often with
manufacturer incentives available dealers can still make money selling at invoice or close to it. So it's good to know going in that for example
others in your area have achieved say invoice + $500
- What the manufactures current lease rates are, these are reflected by a Money Factors (MF) and Residual Value (represented as a %)

Using the workbook

Only enter data in Yellow, most if not all have associated comments/instructions available
If you need more tabs for other cars or options just copy an existing tab or the Blank tab
Any suggestions please email me: Brian.Langley@Gmail.com
Key: Only enter data in yellow boxes

Good place to get lease rates http://forums.roadfly.com/forums/financing/

http://www.leasecompare.com/

Car prices MSRP and Invoice http://www.edmunds.com

http://www.carsdirect.com
http://www.autobytel.com

What deals others are getting http://townhall-talk.edmunds.com/

Car/model specific sites G37 lease information at MyG37.com

Porsche Cayman lease information

Release Note:
V5 - Added NJ 0.4% tax on vehicles over $45K
V6 - Added comparisons to finance purchase and cash purchase
V7 - Added profit and discount % on summary page
V8 - Added NJ luxury tax to summary page
V9 - Made changes to lease vs finance purchase section and included results in summary tab
V10 - Added the cost of the options at invoice and MSRP
V11 - Changed a couple of formulas to make it compatible with OpenOffice
V12 - Added introduction and more comments/notes
 Summary Comparison
Insert Tab Name here--> CaymanS Blank Blank Blank Blank Blank Blank
Notes #REF! #REF! #REF! #REF! #REF! #REF! #REF!

MSRP #REF! #REF! #REF! #REF! #REF! #REF! #REF!

MF #REF! #REF! #REF! #REF! #REF! #REF! #REF!
Residual #REF! #REF! #REF! #REF! #REF! #REF! #REF!
Term (months) #REF! #REF! #REF! #REF! #REF! #REF! #REF!
Neg Price #REF! #REF! #REF! #REF! #REF! #REF! #REF!
Invoice Price #REF! #REF! #REF! #REF! #REF! #REF! #REF!
Over/Under Inv #REF! #REF! #REF! #REF! #REF! #REF! #REF!
Discount from MSRP #REF! #REF! #REF! #REF! #REF! #REF! #REF!
Profit on Invoice #REF! #REF! #REF! #REF! #REF! #REF! #REF!
Monthly Lease #REF! #REF! #REF! #REF! #REF! #REF! #REF!
inc tax #REF! #REF! #REF! #REF! #REF! #REF! #REF!
inc tax (Adj) #REF! #REF! #REF! #REF! #REF! #REF! #REF!
including NJ Luxury Tax #REF! #REF! #REF! #REF! #REF! #REF! #REF!
Finance cost per Month #REF! #REF! #REF! #REF! #REF! #REF! #REF!
Lease or Finance #REF! #REF! #REF! #REF! #REF! #REF! #REF!
Lease vs Finance $ #REF! #REF! #REF! #REF! #REF! #REF! #REF!
At signing Costs
Capital reduction #REF! #REF! #REF! #REF! #REF! #REF! #REF!
1st month #REF! #REF! #REF! #REF! #REF! #REF! #REF!
initiation fee #REF! #REF! #REF! #REF! #REF! #REF! #REF!
bank fees #REF! #REF! #REF! #REF! #REF! #REF! #REF!
docs #REF! #REF! #REF! #REF! #REF! #REF! #REF!
NJ State tax #REF! #REF! #REF! #REF! #REF! #REF! #REF!
plates and reg #REF! #REF! #REF! #REF! #REF! #REF! #REF!
Refundable Deposit #REF! #REF! #REF! #REF! #REF! #REF! #REF!
Total #REF! #REF! #REF! #REF! #REF! #REF! #REF!
Total (Adj) #REF! #REF! #REF! #REF! #REF! #REF! #REF!
excluding first month #REF! #REF! #REF! #REF! #REF! #REF! #REF!

Key: Only enter data in yellow boxes

 Lease Details Comments: Second Quote $830 MF .00300 Res 61% / Month / Month
MSRP $62,195 Car Details MSRP Invoice at Inv at MSRP
Invoice $54,153 Inc Base price 59,100 51,392 736.66 990.50
MF 0.003 As a % = 7.2 Y/N Options
Term 36 Y P74 - Bi-Xenon Headlamp Package 1,090 927 12.90 18.27
Residual 61% Neg residual 68% Y 573 - Automatic Climate Control 550 468 6.52 9.22
State tax rate 7% Y 810 - Floor Mats in Interior Color 115 98 1.37 1.93
Residual Value $37,939 Discount 10.8% Y 342 - Heated Front Seats 480 408 5.67 8.04
Negotiated price $55,503 Invoice +/- $1,350 N P12 - Self-Dim Mirrors & Rain Senso 690 587 8.17 11.56
Depreciation $17,564 Profit 2.5% 0.00 0.00
Monthly cost $488 0.00 0.00
Monthly Finance fees $280 0.00 0.00
Monthly Lease $768 0.00 0.00
tax $54 Y Destination charge 860 860 14.41 14.41
Monthly lease incl tax $822 6.17 $828 Options Total 3,095 2,761 40.87 51.87
Total 62,195 54,153 777.53 1,042.37
Lease vs Financed Purchase
Cost to Finance $64,733 at APR of 6.00%
Monthly payments $1,798 Due at Signing
Effective Cost to own car $26,794 $744 /month Capital reduction $0
Save/invest delta from lease of $970 /Month at 4.00% 1st month $822
LEASING: Investment Worth $37,035 After 36 Months initiation fee 595
BUYING: Residual value of car $37,939 $904 Diff bank fees 0
Lease vs Cash Purchase docs 199
Interest Rate NJ State tax 7.5
Total lease costs $29,814 $2,414 5.00% plates and reg 253
Cost to own car $21,449 Refundable Deposit
Money left in the bank $29,574 $4,436 5.00% Total $1,876
Total Lease Cost - Cost to Own $8,365 $6,850 Total (Adj) $1,876
Costs - Lost Interest $1,515
NOTE: Tax on purchase $3885 - tax on lease $1936 = $1949 Tax Saving Key: Only enter data in yellow boxes

A B C
5 0.0007 0.2045 0.2033
8.0965
 Lease Details Comments: / Month / Month
MSRP $20,000 Car Details MSRP Invoice at Inv at MSRP
Invoice $18,000 Inc Base price 20,000 18,000 230.41 290.33
MF 0.00236 As a % = 5.664 Y/N Options
Term 39 Y 0 0 0.00 0.00
Residual 62% Neg residual 67% Y 0 0 0.00 0.00
State tax rate 7% Y 0 0 0.00 0.00
Residual Value $12,400 Discount 7.5% Y 0 0 0.00 0.00
Negotiated price $18,500 Invoice +/- $500 Y 0 0 0.00 0.00
Depreciation $6,100 Profit 2.8% Y 0 0 0.00 0.00
Monthly cost $156 Y 0 0 0.00 0.00
Monthly Finance fees $73 Y 0 0 0.00 0.00
Monthly Lease $229 Y 0 0 0.00 0.00
tax $16 Y 0 0 0.00 0.00
Monthly lease incl tax $245 0 $245 Options Total 0 0 0.00 0.00
Total 20,000 18,000 230.41 290.33
Lease vs Financed Purchase
Cost to Finance $20,728 at APR of 2.90%
Monthly payments $531 Due at Signing
Effective Cost to own car $8,328 $214 /month Capital reduction $0
Save/invest delta from lease of $286 /Month at 4.00% 1st month $245
LEASING: Investment Worth $11,894 After 39 Months initiation fee 595
BUYING: Residual value of car $12,400 $506 Diff bank fees 0
Lease vs Cash Purchase docs 199
Interest Rate NJ State tax 7.5
Total lease costs $9,570 $849 5.00% plates and reg 253
Cost to own car $7,395 Refundable Deposit
Money left in the bank $10,225 $1,662 5.00% Total $1,300
Total Lease Cost - Cost to Own $2,175 $2,511 Total (Adj) $1,300
Costs - Lost Interest -$336
NOTE: Tax on purchase $1295 - tax on lease $626 = $669 Tax Saving Key: Only enter data in yellow boxes

A B C
5 0.0007 0.2045 0.2033
8.872975
70 70

60 60
15 f(x) = 0.1262407328x^2 + 2.1387928542x + 0.5098014195
R² = 0.9999420839
14
50 13
50
12
11 2
10 12
40 24
9 40
8 36
7 39
30 42
6 30
5 54
Polynomial (5) 60
20 4 Polynomial (60)
20
3
f(x) = 0.0006686707x^2 + 0.2050948578x - 0.197971365 2
10 R² = 0.9999989227 1
10

0
0 10 20 30 40 50 60 70 0
0 2 4 6 8 10 12 14 16

A B C
0.6000000
1 0.0000200 0.0416 0.0416000 2.5
2 0.0001000 0.0831 0.0827000
3 0.0002000 0.1242 0.1228
f(x) = - 3.151918887213E-05x^3 + 0.0001288345x^2 + 0.0410191449x + 0.0006816117
0.5000000 R² = 0.9999994176 4 0.0004000 0.1649 0.1614
5 0.0007000 0.2051 0.198 f(x) = - 2.05973321503847E-06x^3 + 4.35936111001121E-05x^2 + 0.0411296277x - 0.0403528158
6 0.0010000 0.2446 0.2318 2 R² = 0.9999991975
7 0.0014000 0.2832 0.2622
0.4000000 8 0.0019000 0.3208 0.2884
9 0.0024000 0.3572 0.3097
A
10 0.0031000 0.3922 0.3251 A
Polynomial (A) 1.5
11 0.0039000 0.4256 0.3338
f(x) = - 0.0001410277x^3 + 0.0007807468x^2 + 0.038500346x + 0.0033354579 Polynomial (A)
0.3000000 R² = 0.9999599309 B 12 0.0047000 0.4571 0.3347
13 0.0057000 0.4866 0.3268 B
Polynomial (B)
14 0.0068000 0.5138 0.3088 Polynomial (B)
C
15 0.0081000 0.5384 0.2796 1 C
0.2000000 Polynomial (C)
Polynomial (C)
A B C
2 0.0000300 0.0417 3.00E-16
12 0.0032000 0.4568 0.0024000
0.1000000 24 0.0148000 0.943 0.0240000 0.5
f(x) = 3.3627544580977E-06x^3 - 7.55175409608554E-05x^2 + 0.0009397915x - 0.002251365
36 0.0372000 1.4002 0.0915000 R² = 0.9999600736
39 0.0448000 1.5076 0.1194000
42 0.0533000 1.6116 0.1528000
0.0000000
f(x) = 1.16013071895425E-06x^3 + 1.63892480068949E-05x^2 + 0.00003435x - 4.87032967033005E-05 54 0.0974000 1.9845 0.3559000 f(x) = 2.76397135348585E-07x^3 + 1.8012540370571E-05x^2 + 2.89796931015201E-05x - 0.0001357242
0
R² 0 2
= 0.9999013917 4 6 8 10 12 14 16 60 0.1262000 2.1388 0.5098000
R² = 0.9999984131
0 10 20 30 40 50 60 70

For a given Interest rate For a given period

A B C A B C
% 5 0.0007 0.2045 0.2033 Months 36 0.0409 1.3977 0.0664

Months 36 8.0965 % 5 7.944672

26688.814 2160.86 26688.8144 2120.339

y = 0.0007x2 + 0.2051x - 0.198 y = 0.0007x2 + 0.2051x - 0.198
R2 = 1 R2 = 1