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Re: Calculating sign and drive leases [tidester]

by delta737h on Mon Sep 17 16:47:15 PDT 2007

"It's a nonissue because it is standard practice and beyond the control of salespeople and just about everyone else." That's a lot of baloney. People have to take responsibility for their profession and must be held to high accountability standards. They ought to know the correct way to do the calculations and, collectively, have the POWER to change it if they are inclined to do so. I'm sick and tired of an American society that refuses to be held accountable and responsible. If your business requires calculations; you darn well better know how to do them correctly. Your statement is a very poor excuse. A standard practice? How do you know it's standard practice? Can you provide evidence? There are lease software developers out there that correctly calculate leases in the same way that I do. Granted, they're probably in a minority but they do exist. The developer if LeaseWizard said that my calculations are very "compelling". I'm sure that if you read one of my papers where I proved by calculations both algebraically and using finite difference equations; you would have no choice but to agree. The Rule of 78's should have been outlawed years ago. I believe it's still around and the reason why it's still around is because no one holds the banking industry accountable (outside of the Feds/state). Neither the FRBB or the Comptroller of Curreny has outlawed its use. However, it may be prohibited by some states. We live in a society where the moral compass of legislators and watch dogs is in need of calibration. As long as it's a money maker, it's likely to be around for a while. Hail to the almighty dollar and the heck with academics! Ohio Savings Bank is currrently involved in a large class action lawsuit. I wonder who could have triggered that lawsuit? Now, go ahead and get out your kirby just because I disagreed with you.

Re: Calculating sign and drive leases [volvomax]

by delta737h on Mon Sep 17 14:34:36 PDT 2007

volvomax, "I sell cars for a living,you don't." And I do math and write for a living. "This is a non issue,except to wonks like you." Of course it's a non-issue for you because you can't comprehend what I'm talking about... if you could, we wouldn't be having this dialogue. "More to the point,there isn't any way to do what you want to do." You're being very presumptuous. You don't know that and what's more, you have no idea what I'm capable of accomplishing. Don't underestimate me; it's a bad idea! I can spot incorrect mathematical calculations in a heartbeat. It doesn't matter one hoot whether it's the automotive industry, the aerospace industry (my specialty), real estate, or some area of medical research. "As they say, a little knowledge is dangerous." Yup and you're industry is living proof and so guys like me have to fix things either because because you can't or won't. Afterall, it's a non-issue; right? John

Re: Calculating sign and drive leases [volvomax]

by delta737h on Mon Sep 17 13:54:08 PDT 2007

volvomax, "Are you going to tell me that you alone have determined that there is a problem that needs correcting?" It's not rocket science and to any mathematician, it's blatantly obvious. In fact, my papers have gone through the rigors university peer review and have received favorable commentary. "As those of us who do this everyday have tried to tell you, you are just flat wrong." Just because so many of you do this everyday doesn't make it worthy of the Good HouseKeeping Seal of Approval. Not to be pompous, but I do math for a living; you guys don't. How on earth can you arrive at a rolled in payment that is different from all the remaining payments??? I went through this exercise in a previous post. And, either you see it or you don't. If only every car leasing consumer knew what I knew! Anyway, thanks for wishing me luck. John

Re: Calculating sign and drive leases [volvomax]

by delta737h on Mon Sep 17 12:41:14 PDT 2007

volvomax, If leases are being improperly computed, whether it's the payments, taxes, or othewrwise; we can always institute change. I have successfuly done it at the federal level with regard to the FRBB's Regulation Z. Lease disclosures (Reg. M) are federally manadated. The language of the contracts, and I'm not a lawyer, can't conflict with state law in most instances if not all. I was told by the Ohio Sales Tax Division to provide an addendum to the lease contract showing the tax calculations. There is absolutely no reason why a dealership should resist. "IF there was a real issue,it would be addressed. Since the state of Ohio,and every other state that I am aware of allow these contracts to be written, then they are perfectly legal" Perhaps they're not aware that there IS a problem and, hence, an unresolved issue. I'm not questioning the legality piece, I'm questioning the appropriateness of the calculations; they're clearly flawed in some instances and is the reason why Ohio is agreeable to seeing the calculations. At least the person I spoke with realizes that there is a problem. "I'm sorry that you have a difference of opinion on this,but that is really all you have." We're not talking opinion, we're talking fact. The beauty of mathematics is that it has no use for opinions; only facts. And so, I can mathematically prove that their calculations are flawed. And, when something is flawed, you usually do your very best to fix it. "If you are going to expect a dealer anywhere to see things your way,you are going to have a VERY long wait." The bottom line is that dealerships want to sell cars. I think most will be amenable and cooperate with me. John

Re: Calculating sign and drive leases [british_rover]

by delta737h on Sat Sep 15 12:24:38 PDT 2007

brit, I'm not challenging the tax as long as it is applied according to state laws; good or bad. Fairness is a separate issue that must be addressed with the state. I'm challenging the methodology used to compute lease payments in those instances where the 1st payment is capitalized. I'm concerned that the resulting payments don't reflect the correct tax consistent with state tax laws. The tax laws are a given; it's the existing computational methods that are at issue. For instance, I can guarantee that very few Ohio dealerships (if any) will compute the same payment ($361.71) and sales tax ($692.52) that I did in my post #58. And so, they need to review their computational methods. John

Re: Calculating sign and drive leases [volvomax]

by delta737h on Sat Sep 15 11:22:21 PDT 2007

volvomax, I wish I were wrong so it could be real easy for all concerned. But, unfortunately, I'm not wrong. If it bothers you that much,don't lease the car,just buy it. Like Leonardo DiCaprio said in the movie Titanic when Rose was about to jump off the ship... "I can't, I'm too involved now." I'm actually in the process of writing a leasing textbook for McGraw Hill and so there is much more involved here than the issue of whether or not I sould lease. This is a fairly major under taking that requires a lot of research and there is an awful lot of industry critiqueing and scrutiny taking place. My example is for Ohio only. It may apply to a few other states as well. Your statement: The bottom line is, there really is no way for the state to know which items are taxable and which aren't. Just doesn't make any sense to me at all. You should be able to break down a lease and determine which items are taxable and which ones aren't according to state mandates or guidelines. In fact, a the consumer has the constitutional right to know which items are taxable. For some, the tax may be tax deductible. In Ohio, it's crystal clear. All any state needs to do is provide either a list of taxable items or; provide the dealer with definitive guidelines. Ohio provides a fairly exhaustive list that's fairly cut and dry. Besides, there just aren't that many items involved in a consumer retail lease transaction unless you're getting involved with commercial heavy equipment leases. John