Example: Using a Dollar Residual Value Guidebook
A dollar residual value guidebook provides a specific dollar amount for
the value of the base vehicle at the end of the lease term. It provides
for an adjustment if the mileage allowed in the lease is more or less
than 15,000 miles per year and for additions or deductions for optional
equipment. Most residual value guidebooks for new vehicles use the percentage
method. Guidebooks for used vehicles typically use the dollar method.
Follow these steps to determine the future value of a used 2-year-old 4-door (4d) Spark Sport Utility 4-Wheel-Drive (4WD) Wagon for a 36-month period of use: 1. Suppose in 2003 you want to lease a 2001Spark wagon. Go to the 2001 models and look up the base value of the 4d Spark Sport Utility 4WD Wagon. The guidebook will list the equipment that must be on the vehicle at this value. Compare the actual equipment on the vehicle with this list. 2. If any of the required equipment is not on the vehicle, subtract the stated value of that item (for the 36-month term). For example, if cruise control is a required item and it is not on the vehicle and the guidebook lists the 36-month value as $100, subtract $100 from $12,875:
3. The guidebook will also have a list of items and their values (sometimes on a separate page) that may be on the vehicle. 4. If the vehicle has additional equipment items that are not on the list of required items, add the stated values of those items (for the 36-month term). For example, if the vehicle has a sliding moon roof and a CD player that are not on the required list, then add those items:
5. Mileage adjustment: Finally, make any required mileage adjustment. For each model year, a chart will show an amount to add or subtract based on the beginning mileage plus permitted mileage over the term. The adjustment may be based on the current retail value (CRV) of the vehicle. If a 2-year-old model has 20,000 miles and the lease permits 12,000 miles per year for the 36-month term, the mileage adjustment may tell you to add an amount determined by multiplying the CRV of the vehicle times 6%:
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