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V13 - Second release of my lease calculator
(Feb 8th 2008)
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 based on 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
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Program by: Brian Langley (2007) email: brian@bdlhome.com
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