# Cap Cost, Residual Percentage and Money Factor

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**21**AudiWorld Member

Join Date: Aug 2011

Posts: 100

you should re read most of the post,all of your unknowns are knowns. don't be too philosophical.

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**22**AudiWorld Member

Join Date: Jun 2017

Posts: 100

I'll give you some hard data points for the Jag i-Pace. One of the four Jag dealers in Houston has a very lightly optioned base model i-Pace. It's what I would order. They have it because a customer ordered it that way, but then took a launch Edition when they arrived before his car. The Dealer said they would never get one for stock, that way. It's the way I would order one. The MSRP is $71,573. Without much effort, the dealer took $2500 off that price when I said that I would wait until after Sept 1, when any new Texas $2500 EV grant starts up. Jag is offering 0% financing or a discount of $5K if you bring your own money/financing. That made the car $64,073 before TT&L. If I were buying it and getting the $7500 Fed TC, my cost would be $61,854 out the door.

So, some numbers from Jag: For a 5000 mi annual lease residual is 45% for 36 months and monthly charge is $1574 at $0 cash up front. Sales rep had no idea if there was any credit for the Federal TC in the deal. For Jag zero finance charge, payments are $1612 for o down and 48 months ( $1075 at 72 months). Offset this with $7500 back from the Fed TC in the first year.

Doing the math: 48 month finance zero interest total payments at 39 months is $62,868 less $7500 TC for total cost of $55,368. The Jag lease residual at 39 months is 43%. This is as accurate a number as one can project at this time and would suggest, at best, a residual of 43% or $30,776. If you sold the car at that time, it would put the cost at $24,591 for 39 months, or $630/month. Good deal? Beauty is in the eye of the beholder. But it does show that the tax credit offsets some of the pain of low residuals.

Someone please show me the error in the following logic, which takes advantage of the ZERO finance charge being offered by Jag:

72 month financing, zero down: $1075/month--this is the number I have on my quote.

39 months X $1075 is total paid $41,925

tax credit $7,500

out of pocket $34,425

39 month residual of 43% $30,776

total cost $3,649/39 is $93.56 per month

With numbers like this, the residual could be 25% and it's still a good deal--The magic of ZERO finance charge and a tax credit.

If my logic is correct, all of us pray for a zero finance deal from AFS.

So, please check my logic!!!

So, some numbers from Jag: For a 5000 mi annual lease residual is 45% for 36 months and monthly charge is $1574 at $0 cash up front. Sales rep had no idea if there was any credit for the Federal TC in the deal. For Jag zero finance charge, payments are $1612 for o down and 48 months ( $1075 at 72 months). Offset this with $7500 back from the Fed TC in the first year.

Doing the math: 48 month finance zero interest total payments at 39 months is $62,868 less $7500 TC for total cost of $55,368. The Jag lease residual at 39 months is 43%. This is as accurate a number as one can project at this time and would suggest, at best, a residual of 43% or $30,776. If you sold the car at that time, it would put the cost at $24,591 for 39 months, or $630/month. Good deal? Beauty is in the eye of the beholder. But it does show that the tax credit offsets some of the pain of low residuals.

Someone please show me the error in the following logic, which takes advantage of the ZERO finance charge being offered by Jag:

72 month financing, zero down: $1075/month--this is the number I have on my quote.

39 months X $1075 is total paid $41,925

tax credit $7,500

out of pocket $34,425

39 month residual of 43% $30,776

total cost $3,649/39 is $93.56 per month

With numbers like this, the residual could be 25% and it's still a good deal--The magic of ZERO finance charge and a tax credit.

If my logic is correct, all of us pray for a zero finance deal from AFS.

So, please check my logic!!!

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**23**Someone please show me the error in the following logic, which takes advantage of the ZERO finance charge being offered by Jag:

72 month financing, zero down: $1075/month--this is the number I have on my quote.

39 months X $1075 is total paid $41,925

tax credit $7,500

out of pocket $34,425

39 month residual of 43% $30,776

total cost $3,649/39 is $93.56 per month

With numbers like this, the residual could be 25% and it's still a good deal--The magic of ZERO finance charge and a tax credit.

If my logic is correct, all of us pray for a zero finance deal from AFS.

So, please check my logic!!!

*Last edited by SYMAWD; 04-14-2019 at 07:55 AM.*

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**24**AudiWorld Member

Join Date: Apr 2000

Location: Orange County, CA

Posts: 143

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**25**AudiWorld Member

Join Date: Jun 2017

Posts: 100

Yes, stupid me. Better than leasing as you can still get the tax credit, but you still have the hassle/risk of the resale. Although you do have the flexibility of ending the arrangement whenever you want. Could do better if residual is higher than Jag's estimate, but the history of EV's is that resale is lousy for everything except Tesla. I still maintain that this is hard financial data on a competing car to the e-Tron.

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**26**AudiWorld Member

Join Date: Jun 2017

Posts: 100

Not applicable as I wasn't doing calculations on a lease, just using the lease residual as a stand in for resale. However, the error of my "perpetual motion machine" is shown in the other post.

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**27**AudiWorld Member

Join Date: Apr 2000

Location: Orange County, CA

Posts: 143

None of the calculations make sense. You cannot take the federal tax credit off of a lease unless they use it as a cap reduction. Also, the whole reason you cannot use a lease residual to stand in for resale is that you do not own a car after a lease; the residual is what you would have to pay to buy the car you borrowed (if there was an agreement from the leasing company for this).

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**30**AudiWorld Member

Join Date: Apr 2000

Location: Orange County, CA

Posts: 143