Quote:
|
Originally Posted by Surefoot
Actually, the two others in this thread said that the rebate money is used as a credit against the amount due at signing. Applying the rebate to reduce the initial capitalized cost means that it is NOT applied to reduce the amount due at signing. The problem with applying the rebate to reduce the initial capitalized cost is that you then only get the benefit of the percentage of the rebate that corresponds to the depreciation percentage for your lease (i.e., February's residual on a 36 month / 12k mpy lease is 63%, meaning you pay the 37% depreciation over the life of the lease).
This is why I'm focused on this and want to make sure the dealer applies the $1,000 rebate in the proper place.
|
$1k credit can be used to cover drive-off fees or applied as Cap Cost Reduction (not subtracted from selling price directly). But either way your math is wrong. Cap cost reduction or dealer discount both go directly into the payment. Residual is based on MSRP and has no relation to the amount if discount or cash down you have.
Simple scenario:
$50k selling price and $25k residual- your monthly depreciation is the difference ($25k) divided by 36 months.
Now use your $1k credit as cap cost reduction. Residual stays $25k. So you now have to pay $24k depreciation over 36 months. You got the full benefit of the $1k.