A subvented lease is a type of lease where manufacturers reduce the cost of the lease through a subsidy, usually through the increase of the residual value or the decrease of the interest rate. These subsidies reduce the monthly payments that the lessee is required to pay over the life of the lease.
You can apply subvention for the following type of lease:
-
Operating Lease
-
Finance Lease
-
Loan
The following example illustrates how a subvented lease works:
From the dealer’s perspective:
|
Normal Deal |
Subvented Deal |
|
|---|---|---|
|
Recommended Retail Price |
24,990 |
24,990 |
|
Buying Price to Dealer |
17,000 |
17,000 |
|
Subvention by Dealer |
Nil |
750 |
|
Cost Price to Lessee |
20,000 |
20,000 |
|
Financed Amount |
20,000 |
19,250 |
|
Dealer Margin |
3,000 |
2,250 |
From the lessor's perspective
|
Normal Deal |
Subvented Deal |
|
|---|---|---|
|
Target Yield |
10% |
10% |
|
Financed Amount |
20,000 |
19,250 |
|
Term in Months |
12 |
12 |
|
Residual Value |
0 |
0 |
|
Monthly Rent |
1,743.79 |
1,678.39 |
From the lessee's perspective
|
Normal Deal |
Subvented Deal |
|
|---|---|---|
|
Equipment Value |
20,000 |
20,000 |
|
Term in Months |
12 |
12 |
|
Residual Value |
0 |
0 |
|
Monthly Rent |
1,743.79 |
1,678.39 |
To generate pricing for a subvented lease, you can specify either the subvention amount or the subvention percent. The percentage value is calculated on the equipment's estimated selling price.
Prerequisites
None.
Steps
To generate pricing for a subverted lease, perform the following steps:
-
Log in to your Salesforce account.
-
Select
(App Launcher).
-
Search for
Q2 Origination, and then select it. -
Select Applications, and then select the required lease application.
-
Select Lease Pricing > Pricing.
-
Specify the Subvention Amount or Subvention Percent field values.
-
Confirm the other pricing details, and then select Generate Pricing.