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Thread: Volt Lease Terms

  1. #1

    Default Volt Lease Terms

    I've been playing with the numbers on the proposed Volt Lease, and the way I can get to the $350/month payment for a 36 month term is to assume:

    1. MSRP of $40,280
    2. A Residual Percentage of 55%
    3. That for purposes of calculating the monthly depreciation, GM starts with the negotiated purchase price LESS the $7,500 rebate (instead of the full MSRP) - i.e. it's (32,780-22,154)/36
    4. A Money Factor of about 0.0010416 (the equivalent of 2.5% APR)
    5. A Capital Cost Reduction (Down Payment) of $2,500

    Is there anyone with a connection to GM Finance or US Bank who can confirm? I just want to calculate what my actual payment will be equipped with the options I've chosen, and want to know if using the correct baseline assumptions.

    Thanks!

  2. #2
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    There's this post and some followup in another thread. http://gm-volt.com/forum/showthread....8436#post48436

    Sharon reports:

    Yesterday I was shown a document entitled "12-3-10 US Bank Residual Values". Included in this document was a page entitled "Rate Sheet - Chevrolet" which was mostly like a foreign language to me. However, there was also a page entitled "Volt Residual". Below is what was on that sheet:

    *Example
    MSRP 44680.00
    36mo % x 43%
    Base Residual Value = 19212.40
    Credit + 7500.00
    Contract Residual Value = 26712.40

    There is discussion as to exactly what this means, read my followups. In hindsight, I should have started a new thread.

  3. #3
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    Quote Originally Posted by Marty View Post
    There's this post and some followup in another thread. http://gm-volt.com/forum/showthread....8436#post48436

    Sharon reports:

    Yesterday I was shown a document entitled "12-3-10 US Bank Residual Values". Included in this document was a page entitled "Rate Sheet - Chevrolet" which was mostly like a foreign language to me. However, there was also a page entitled "Volt Residual". Below is what was on that sheet:

    *Example
    MSRP 44680.00
    36mo % x 43%
    Base Residual Value = 19212.40
    Credit + 7500.00
    Contract Residual Value = 26712.40

    There is discussion as to exactly what this means, read my followups. In hindsight, I should have started a new thread.
    I'm not an auto lease expert, but my take away from these numbers is that this results in a $533/month lease [$19212/36 mos], the contract residual will be the cost to purchase the vehicle after the lease expires.

    Any experts out there, please comment!

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    Quote Originally Posted by sgc View Post
    I'm not an auto lease expert, but my take away from these numbers is that this results in a $533/month lease [$19212/36 mos], the contract residual will be the cost to purchase the vehicle after the lease expires.

    Any experts out there, please comment!
    Not an expert, but my take is:

    44680 price
    - 2500 cap. cost reduction (up front payment)
    - 7500 tax credit to GM
    --------
    34680.00 subtotal
    - 19212.40 residual
    --------
    15467.60 amount finenced
    / 36 months
    -------
    429.65 per month

    Now, that assumes a zero percent money factor. And that's a loaded car. The base price is 40,280.00.

    I think the "Contract Residual" is what the bill of sale will be if the lessee decides to buy, for sales tax purposes. The base residual should be the cash buyout.

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    Thanks Marty! That does make more sense than my dribble. Amazing how $4000 in options can raise the monthly lease from the advertised $350/mo. to $430 [plus tax!]

  8. #6
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    Ya that is what I can't figure out. The cost to add the options is raising the payment $80? Isn't that pretty much assuming the options have almost no residual? I guess I am concerned that my payment is increasing 20% for a 9% increase in MSRP... Is this really going to be the case?

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    Quote Originally Posted by sgc View Post
    Thanks Marty! That does make more sense than my dribble. Amazing how $4000 in options can raise the monthly lease from the advertised $350/mo. to $430 [plus tax!]
    That's about on the mark, though. As I recall the rule of thumb is about $20 per thousand.

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    Quote Originally Posted by cheifsfan View Post
    Ya that is what I can't figure out. The cost to add the options is raising the payment $80? Isn't that pretty much assuming the options have almost no residual? I guess I am concerned that my payment is increasing 20% for a 9% increase in MSRP... Is this really going to be the case?
    I think there's some subsidizing in the $350 figure. Let's take a base car, using the same 43% residual. Note that these are all net figures, exclusive of taxes, license, etc. and assuming that you have an honest dealer who isn't going to try to rip you off with documentation and origination fees, etc. :

    40280.00 MSRP
    - 2500.00 Cap. cost reduction (up front payment)
    - 7500.00 Tax rebate captured by lessor
    ----------
    30280.00 subtotal
    - 17320.40 residual (40280 * 43% - Sharon's US Bank figure)
    ---------
    12959.60 amount financed
    / 36 months
    ---------
    359.99 per month.

    again assumes zero money factor (finance charge)

    Now as I posted in another thread, 359.99 is a very suspicious-looking number. If GM had said "under $360" instead of "$350" it would make sense. So maybe they're subsidizing it by $9.99 per month but only on a no-options car. Maybe Sharon's 43% residual figure is incorrect.

    Note that these are net numbers.

    Real world up front:

    $2500.00 on signing - as advertised
    720.00 destination charge
    257.60 sales tax (figured on $3220 at 8% - will vary)
    539.00 registration (California, from https://mv.dmv.ca.gov/FeeCalculatorW...VehicleForm.do)
    ---------
    $4016.60 Zero options, MSRP, no added scam fees, estimated tax and registration for California

    Real world monthly lease:

    $350.00 (GM advertised, may really be 359.99)
    28.00 Sales tax at 8% - estimated)
    ---------
    $378.00 (May really be 388.79 if base payment is really 359.99)

    Real world purchase at lease end:

    $17320.40 residual
    1985.63 sales tax at 8% on $24820.40 - Add the $7500 tax credit back in, state taxable.
    ----------
    $19306.03

    Again zero options, zero scam fees, estimated sales tax of 8%.

    The key questions that someone with a Volt about to be delivered need to ask:

    * What would be the sale price of the car?
    * Itemize exactly what I pay up front. How much of it is cap cost reduction?
    * Exactly what is my lease payment? Does that include sales tax?
    * If I decide to buy the car at lease-end, for what amount do I write the check exclusive of tax?

    Residual and money factor numbers would be nice.

    FYI, to convert lease money factor to equivalent APR, multiply by 2400 (regardless of lease term).
    Last edited by Marty; 12-14-2010 at 08:22 PM.

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    Excellent post, thanks Marty! I'm going to add that to the FAQ.

    Has anyone found a good lease payment calculator online? The one I've used so far is the first Google hit, and is OK but it's Flash based and is a pain to do what-if scenarios with.
    2011 Volt #284, ordered 30-Jul-2010, built 30-Nov-2010, shipped 15-Dec-2010, delivery 22-Dec-2010, lease return 22-Dec-2013, Hidden Content
    - Hidden Content
    - Hidden Content
    - do yourself a favor and register at Hidden Content immediately so you can track your Volt's performance

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  13. #10
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    Quote Originally Posted by ChrisC View Post
    Excellent post, thanks Marty! I'm going to add that to the FAQ.

    Has anyone found a good lease payment calculator online? The one I've used so far is the first Google hit, and is OK but it's Flash based and is a pain to do what-if scenarios with.
    As soon as we get some hard numbers on the actual residual percentage, etc. I'll post a Google Docs spreadsheet and/or an Excel template. Keep in mind if you got here from the FAQ that there are a LOT of SWAGs and assumptions in that post. And we know the derivation of the word "assume".
    Last edited by Marty; 12-14-2010 at 08:14 PM.

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