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To make sure I understand:
Net of the incentives, the purchase price was about 28,000. (destination, taxes, proc fees, etc is sunk money. we can't count that)
Since you didn't say, I'm going to assume the security deposit was $1200 and you paid $2000 down (I think "cap cost reduction" is the lingo)
If you assume a 7% interest rate and 330/month for 36 months, we find that the principle financed over this term was $10,700.
(lets recap here before I go further)
Price: 30,000
Incentives: (2,000)
Actual Price: 28,000
Down Pmt: (2,000)
This means we have 26,000 that we need to account for. (note: we aren't talking value of the vehicle. we're talking lease inception financing)
Backing into the financed amount, I came up with just under $11,000. (a lower rate doesn't affect the calculations much at all so this number is very close). According to our math above, that means that Chase was expecting to have $15,000 worth of car at the end of the lease program.
I think we can see here why they won't negotiate much.
Now there are some other considerations. Since chase owned the car, they claimed depreciation each year to the IRS. They depreciated 13,000 (the 11,000 plus your security deposit) over three years. @ a corporate rate of 26%, I figure this gave them a tax savings of about 1,100 each year. So now we're down to about $11,700. You're thinking..."AHA"
But there are some other things: You have to add back administrative expenses, overhead, transportation of the lease return vehicle to an auction, auction listing fees. (1500???) That brings us back up to $13,200. Assuming they want to pad a little profit into the resale of the vehicle (and naturally save some of the expenses I mention above) then they may be near the bottom of their negotiation range.
Got all that? ;-)
Here's the twist that makes things tricky. I don't think your car is *worth* what they're asking. They certainly won't get that much at a Manheim liquidation auction. So where does that leave us?
Back where we started! LOL
They want more than the car is worth and they're facing a loss on it. If you want it, buy it. You know how much its probably worth and Chase really isn't all that far off. You know how its been taken care of and driven. On the other hand, you lose nothing by waiting. Chase may be watching monthly numbers, quotas, and so forth and decide to come down some more rather than go through the reclaim, transport, auction process.
Luck!
posted by 162.70.5...
, Fri, 7 Jun 2002 22:19:04
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