Estimated monthly cost for a lease in NJ?

[pooter03]

I reserved a Premium trim back in February with an MSRP of 50,600*. I'm almost certainly going to lease for a variety of reasons (short commute, don't want to buy a first generation car, etc.) Along with the $7500 federal tax incentive, in NJ there is a state tax incentive of $7500 for electric vehicles along with no sales tax.
I used a couple of lease calculators assuming a few thousand down payment, 3 year lease, 10,000 miles a year, $35,000 residual, 4% interest, and it came out to around $215 a month.
That seems so low that I had to have done something wrong. Am I missing something? If not, I'm definitely upgrading when the order bank opens up.

*I'm switching to a dealer who promised to honor MSRP.

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[Johnny]

I reserved a Premium trim back in February with an MSRP of 50,600*. I'm almost certainly going to lease for a variety of reasons (short commute, don't want to buy a first generation car, etc.) Along with the $7500 federal tax incentive, in NJ there is a state tax incentive of $7500 for electric vehicles along with no sales tax.
I used a couple of lease calculators assuming a few thousand down payment, 3 year lease, 10,000 miles a year, $35,000 residual, 4% interest, and it came out to around $215 a month.
That seems so low that I had to have done something wrong. Am I missing something? If not, I'm definitely upgrading when the order bank opens up.

*I'm switching to a dealer who promised to honor MSRP.

I'm in NJ as well. I think your residual is probably too high. Also the NJ credit is $5,000, not $7,500.

Here's the assumptions I was going off of when calculating "Ford Options":

	Ford "Options"
MSRP
Mustang Mach E Premium	50,000
Std Range AWD	2,700
Infinite Blue Paint	400
D&D	1,100
Total MSRP	54,200
X Plan Discount (2% less $275)	(779)
Cost basis	53,421
Down Payment (cash)	(7,000)
Trade In	(3,000)
Tax Credit (IRS)	(7,500)
Tax Credit (NJ)	(5,000)
Total amount financed	30,921
Balloon Payment	18,697	35%​
Interest Rate	4.00%​
Term (months)	36
Payment per month	$423.22​
Total cost to purchase	40,933.10

 

[benboy12]

I'm in NJ as well. I think your residual is probably too high. Also the NJ credit is $5,000, not $7,500.

Here's the assumptions I was going off of when calculating "Ford Options":

	Ford "Options"
MSRP
Mustang Mach E Premium	50,000
Std Range AWD	2,700
Infinite Blue Paint	400
D&D	1,100
Total MSRP	54,200
X Plan Discount (2% less $275)	(779)
Cost basis	53,421
Down Payment (cash)	(7,000)
Trade In	(3,000)
Tax Credit (IRS)	(7,500)
Tax Credit (NJ)	(5,000)
Total amount financed	30,921
Balloon Payment	18,697	35%​
Interest Rate	4.00%​
Term (months)	36
Payment per month	$423.22​
Total cost to purchase	40,933.10

I don’t think the Ford Options lease allows you to take the tax credits off the financed amount since it’s not a traditional lease.

 

[hybrid2bev]

I'm in NJ as well. I think your residual is probably too high. Also the NJ credit is $5,000, not $7,500.

Here's the assumptions I was going off of when calculating "Ford Options":

	Ford "Options"
MSRP
Mustang Mach E Premium	50,000
Std Range AWD	2,700
Infinite Blue Paint	400
D&D	1,100
Total MSRP	54,200
X Plan Discount (2% less $275)	(779)
Cost basis	53,421
Down Payment (cash)	(7,000)
Trade In	(3,000)
Tax Credit (IRS)	(7,500)
Tax Credit (NJ)	(5,000)
Total amount financed	30,921
Balloon Payment	18,697	35%​
Interest Rate	4.00%​
Term (months)	36
Payment per month	$423.22​
Total cost to purchase	40,933.10

The problem here is that you can't deduct the $7500 tax credit from the IRS in your financing. You'll need to file your taxes to get that credit money. And you'll need to divide it out into 35 monthly payments. The 36th payment is the balloon note.

I'm not sure about the NJ credit either, remember this is not a lease so the credit would apply as it would for a regular retail purchase.

 

[timbop]

I'm in NJ also, and the NJ rebate is definitely only $5000. For the $7500 federal tax rebate I was planning to "lend" myself the $7500 by pulling it out of savings to put down on the car, and then put it back into savings when I get my tax refund the following year. The downside is that you're out the money for a year or more if you get the car delivered in early 2021. To compensate for that, one could go to HR and alter your withholdings so you get more in your paycheck - but you'd have to make sure to fix that the following January so you don't withhold too little the next year. I'd check with an accountant to make sure that is kosher, too.

 

[Johnny]

The problem here is that you can't deduct the $7500 tax credit from the IRS in your financing. You'll need to file your taxes to get that credit money. And you'll need to divide it out into 35 monthly payments. The 36th payment is the balloon note.

I'm not sure about the NJ credit either, remember this is not a lease so the credit would apply as it would for a regular retail purchase.

Understood - I am planning on loaning myself the $7,500 (out of savings or HELOC) and add it to the down payment and paying myself back once taxes are filed.

Biggest question I have in the calculation is what is a reasonable assumption for the balloon payment? Is 35% ok, or would it be lower (or higher)? @hybrid2bev - you seem to be one of the more knowledgeable people here on Ford Options. Any idea?

ETA - NJ is planning on allowing dealers to directly deduct the $5,000 from the purchase price. So it is directly deducted and has nothing to do with income tax.

 

[pooter03]

Ugh, I could have sworn it was $7500. Dunno how I made that mistake. $420s sounds a lot more realistic.

 

[pooter03]

I don’t think the Ford Options lease allows you to take the tax credits off the financed amount since it’s not a traditional lease.

The last two cars I leased were PHEVs, one being a Ford Fusion, and both times, the dealers took the $7500 off the MSRP before negotiating.

 

[hybrid2bev]

I reserved a Premium trim back in February with an MSRP of 50,600*. I'm almost certainly going to lease for a variety of reasons (short commute, don't want to buy a first generation car, etc.) Along with the $7500 federal tax incentive, in NJ there is a state tax incentive of $7500 for electric vehicles along with no sales tax.
I used a couple of lease calculators assuming a few thousand down payment, 3 year lease, 10,000 miles a year, $35,000 residual, 4% interest, and it came out to around $215 a month.
That seems so low that I had to have done something wrong. Am I missing something? If not, I'm definitely upgrading when the order bank opens up.

*I'm switching to a dealer who promised to honor MSRP.

Using your figures at $50,600 excluding destination, 10.5k miles per year, 36 month term, 2k down, no sales tax and 4% rate. Excluding the $7500 and $5000 tax credit and rebates. I would estimate your payment in the $800 range. But you would need to consult your dealer.

I think at 36 months and low miles your estimated residual percentage would be on the higher end of the 30%-40% range, maybe even a bit higher.

 

[hybrid2bev]

Understood - I am planning on loaning myself the $7,500 (out of savings or HELOC) and add it to the down payment and paying myself back once taxes are filed.

Biggest question I have in the calculation is what is a reasonable assumption for the balloon payment? Is 35% ok, or would it be lower (or higher)? @hybrid2bev - you seem to be one of the more knowledgeable people here on Ford Options. Any idea?

ETA - NJ is planning on allowing dealers to directly deduct the $5,000 from the purchase price. So it is directly deducted and has nothing to do with income tax.

Same for you too. I think at 36 months and low miles (10,500 per year) your estimated residual percentage would be on the higher end of the 30%-40% range, maybe even a bit higher.

 

[hybrid2bev]

The last two cars I leased were PHEVs, one being a Ford Fusion, and both times, the dealers took the $7500 off the MSRP before negotiating.

But those were traditional leases. Ford Options is not (it's a retail balloon note). Different rules apply.

 

[JSOrange97]

ETA - NJ is planning on allowing dealers to directly deduct the $5,000 from the purchase price. So it is directly deducted and has nothing to do with income tax.

I’m in NJ too and when I looked at the docs last week, the Point Of Sale credit was in phase 2. I believe we are currently in Phase 1 which requires you to apply after the purchase.

 

[UW2]

I don’t think the Ford Options lease allows you to take the tax credits off the financed amount since it’s not a traditional lease.

There would be no Dealer Handling Charge?

 

[timbop]

I’m in NJ too and when I looked at the docs last week, the Point Of Sale credit was in phase 2. I believe we are currently in Phase 1 which requires you to apply after the purchase.

Yes, phase 2 will be in place by the time the Mach E starts shipping

 

[pooter03]

I don’t think the Ford Options lease allows you to take the tax credits off the financed amount since it’s not a traditional lease.

From what I understand, Ford Options is a purchasing program, so I can't see why they wouldn't take at least the federal incentives off.
In any case, it doesn't really matter, either I get $12500 off up front, or I get $12,500 back from the IRs. That's $347/mo over 3 years.

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