Where's the 55-60% coming fromORSales wrote:Yeah, you're kind of misunderstanding the structure here. Our lease rate is actually 4.2%. The initial payment is an upfront chunk towards the 12x monthly payments. As mentioned, we could have made the monthlies higher but it meant much higher risk for us up front and I couldn't get accounting to sign off on that. Instead, we put the inception payment up front and then made the monthlies much lower. The result is the same, after 12 months you have paid us roughly 55-60% of the retail cost of the kite.Johnny Rotten wrote: $500 up front on 1649 means your leasing a $1149 for $77 a month for 10 months with a fair market residual of 700
Using the 12m example you pay 1220 on 1649 and walk NOTHING that's 74% of the retail cost.
You don't need to do the math to realize that paying for 75% of a product and getting nothing at the end of a year is a shit deal! and is why most people have lit up this post.
using the 12m example:
From a financial perspective You have an 11 month lease, 1649 principal, with 429 down (Lease inception + last month payment) with a residual of 569 (which is excessivley conservative....in your favor)
To the penny that is an interest rate of 21.56% about as good as bad credit card
Now if you use a reasonably conservative residual of 700 that number jumps to 34.73%
I think you guys need to check your math....The only way you are getting a 4.2% interest rate is if you forgot to include the 1st and last month payment in the calculation ......take it back to accounting.....
I think the idea is great and honestly don't believe you intented to stack the financial odds this heavily in your favour., but when you combine a mis-calculated target interest rate with a overly conservative residual the resulting offer is glaringly bad to your perspective customers.