Introduction The John Deere Financial Calculator enables the user to calculate payments, solve for interest rates and solve for the amount financed based on specific contract information entered by the user.
John Deere Financial Calculator Main Screen
The main screen of the calculator has five main areas of functionality:
To discover "what this is..." hover your mouse over any of the fields or buttons on the calculator image below to view a short description. Clicking on the field or button will take you to more information. USE THE BACK BUTTON ON YOUR BROWSER TO RETURN TO FIGURE 1.
Before You Start
Effective Rate (U.S. Only) – The field displays the nominal annual rate and is updated after changes are made to the initial payment schedule (waivers, extensions, buy-downs, etc.).
5. Contract Date – Enter the date the contract begins. The date has to be entered as MM/DD/YYYY.
6. Amount Financed Field and Details Button – Figure
your deal or Amount Financed
7. Payment Amount – The payment amount appears in this field, it is non-editable when you are solving for Payment Amount. However, when you are solving for Amount Financed or Interest Rate, you must enter the desired payment in this field.
8. Interest Rate – Enter the contract
rate, unless you are solving for Interest Rate, which makes the field uneditable.
9. Interest Begin Date – This is
the date that interest will start to accrue on the contract. Note: It is possible
to add a waiver to the contract to start interest accrual at a later date. A
waiver is the only type of calculation that will change the finance begin date.
10. Number of Payments – The number of
payments the customer is responsible for making over the term of the contract.
11. Repayment Frequency – This is
the frequency by which payments are made.
12. First Payment Date – This is the date that the first payment should be made by the customer. The date has to be entered as MM/DD/YYYY. The default is one payment frequency from the contract date, e.g., semi-annual would be 6 months from the contract date, for Canadian Installment and Lease and U.S. Lease. Calculate Payments Clear Clear All
8. Interest Rate – Enter the contract rate, unless you are solving for Interest Rate, which makes the field uneditable.
9. Interest Begin Date – This is the date that interest will start to accrue on the contract. Note: It is possible to add a waiver to the contract to start interest accrual at a later date. A waiver is the only type of calculation that will change the finance begin date.
10. Number of Payments – The number of payments the customer is responsible for making over the term of the contract.
11. Repayment Frequency – This is the frequency by which payments are made.
12. First Payment Date – This is the date that the first payment should be made by the customer. The date has to be entered as MM/DD/YYYY. The default is one payment frequency from the contract date, e.g., semi-annual would be 6 months from the contract date, for Canadian Installment and Lease and U.S. Lease.
Figure 3, above, shows the the Payment Schedule window. Within this window you can edit the payment schedule. The payments may be altered using the Payment Schedule buttons described below (Skip, Skip Months, Fix, Fix Months, Add and Balloon). These buttons are not enabled until the contract information has been entered and the Calculate Payments button has been depressed.
A second window, Add Payment Amount, Figure 5, appears prompting for the payment amount. If an amount is typed in, it will be applied to that payment, and the other payments will be adjusted to account for this new payment, as illustrated in Figure 6, below. If the amount is left as $0.00, the new payment date is added to the schedule and equal payment amounts are recalculated to include the additional payment date in the schedule.
Fix Months Button
Skip Months Button
Buy-Down Button - Low Rate/Buy Down/Extensions
The Buy-Down button opens the Low Rate/Buy Down/Extensions box, two examples are shown in Figure 14.
You may either solve for the dealer cost by entering a desired buy-down rate or solve for a rate by entering a dealer cost amount.
Click the Apply button if you wish to apply this new rate to the contract.
If you wish to calculate the dealer cost by entering a desired rate, enter the interest rate in the Contract Rate One box, as shown in Figure 15,
Click the Calculate button to determine the dealer cost of the buy-down. The dealer cost to buy-down the rate will be shown in the Dealer Cost box.
Click the Apply button and payments are adjusted to reflect the lower rate. The dealer cost of the buy-down will display in the Cost/Comp screen.
Low Rate Extension/Buy Down after an Extension
To extend a Deere-Sponsored Low Rate Program enter the contract information on the main screen. The interest rate entered should be the buy rate (6.75%) and the number of payments (5 annual) should include the extension period (12 months). See the example below, Figure 16.
After calculating the payments by selecting the Calculate Payments button, select the Buy Down button, to launch the Low Rate/Buy Down/Extensions box. Enter the Deere-Sponsored low rate (5% for 48 months) in the "contract rate 1" field and enter the number of months provided by Deere in the appropriate field. Select the Calculate button. The cost of the extension will appear in the "Dealer Low Rate Extension Cost" field as shown here in Figure 17.
If you wish to buy a Deere-Sponsored rate down further in addition to extending the term, you must first extend the term per the above instructions. After you have calculated the cost of the extension, the Buy Down After Ext button becomes available. Clicking this button launches the Low Rate Extension Buy Down box. Figure 18, below. Enter the rate, 4.5%, you would like to buy the contract down to in the Contract Rate field and select the Calculate button. The dealer cost will appear in the "Cost to Dealer" field, Figure 18 below. If you wish to apply this rate to the contract select the Apply button. This will bring you back to the Low Rate/ Buy Down/ Extensions Box, Figure 19. The "Dealer Low Rate Cost " field will be updated with the cost amount from the Low Rate Extension Buy Down box as shown in figure 19.
To apply both the lower rate and the extension to the contract click the Apply button from the Low Rate/ Buy Down/ Extensions Box. Notice in Figure 20, the Contract Rate and Payment Schedule has been adjusted from Figure 16, above. The total dealer cost will be calculated in the Cost/Comp Summary screen.
To calculate a blended rate you need to add a contract rate to the Contract Rate One box and the Contract Rate Two box along with the Portion of AF (amount financed) for each respective rate.
When the second contract rate is entered in Contract Rate Two box the calculation appears in the Blended Rate box. In the example below, Figure 21, the blended rate is 8.50% and total amount financed is $200,000.
Click the Calculate button and then the Apply button to automatically change the Interest Rate and Payment amounts in the Payment Window on the main screen.
In the above example, Figure 21, we have two pieces of equipment at two different rates - one with an amount financed for $125,000 at 7.75% and another with an amount financed of $75,000 at 9.75% - total amount financed is $200,000. The blended rate calculation is 8.50%. Note - The initial contract must be calculated at the higher rate, in the above example – 9.75%.
The Waiver button opens the Waiver Calculation box.
Dealer Purchased Waiver – There are two options for calculating dealer-purchased waiver. You can enter the dealer cost amount you choose to spend and the calculator returns the number of waiver months that can be purchased without going over that amount (only full months of wavier can be purchased if you choose this method). You can also enter the Dealer Waiver End Date and the calculator returns the Dealer Cost.
To calculate the number of months of waiver based on a dealer cost amount, select the Solve for Waiver Period by Dealer Cost check box – only the Dealer Cost field is enabled. Enter the dollar amount of desired dealer cost and click the Calculate button. The Dealer Waiver End Date is populated with the number of waiver months that can be purchased. When using this method, the calculator determines the number of whole waiver months that can be purchased for the amount entered, without exceeding the amount.
The Dealer Cost field is updated to reflect the exact cost of purchasing the waiver, but will never exceed the original amount entered. If the amount entered is not enough to purchase at least one month of waiver an error message displays. If you wish to apply the waiver period to the contract press the Apply button and the Payment Schedule is adjusted to reflect the waiver. The calculated Dealer Cost displays in the Cost/Comp Summary Screen.
To calculate the cost of offering a waiver by entering the Dealer Waiver End Date, enter the date when the dealer- sponsored waiver should expire and press the Calculate button. The cost of the waiver appears in the Dealer Cost field. Press the Apply button to apply the waiver on the contract.
Figure 22 shows a three-month waiver with a Dealer Waiver Cost of $1,631.04, which will be reflected in the Cost/Comp Summary screen.
Deere-Sponsored Waiver with Dealer Waiver – Enter the dates when the waiver periods expire for the Deere Waiver and the Dealer Waiver. Press the Calculate button and Apply button to apply the waiver on the contract.
Deere-Sponsored Waiver with Dealer Participation – Enter the date when the waiver period expires for Deere and press the Calculate button. This causes the Participation button to become active. Click the Participation button, dealer participation can now be added to the contract. The cost of dealer participation will be shown in the Cost/Comp Summary box when the Cost/Comp button is depressed.
Amortization Button and Schedule
For Retail Contracts only, this button displays the amortization table at the bottom of the calculator screen, similar to Figure 23, below. The window allows the user to check the amortization of the contract. No editing may be done within this table. The scroll bar at the right allows the user to see all the payments even though they all may not appear in the window. The entire Amortization Schedule may be printed from the Print Quote Screen by clicking the Schedule Button.
This table shows all payments as well as the principal and interest amounts for each payment. The columns are totaled at the bottom of the table.
The printed dealer quote shows total compensation and dealer costs.
Many of the lease fields and buttons are the same as those for retail. Hover your mouse over the field or button on the on the Lease Interface shown in Figure 25 below, for a short description of that field or button. Clicking on the field or button will take you to a more detailed explanation. USE THE BACK BUTTON ON YOUR BROWSER TO RETURN TO FIGURE 25.
Note: All lease calculations are pre-tax
The lease field descriptions are similar to the retail fields except for the following:
1. First Payment Date - The
calculator default is ONE ADVANCE PAYMENT, and the calculator will AUTOMATICALLY
set the first payment date to match the contract date. The first Payment Date can also be manually adjusted if needed.
When manually adjusting MAKE SURE THE FIRST PAYMENT DATE AND PURCHASE OPTION DATE ARE CORRECT.
After you enter all of the lease fields and click the Calculate Payments button you generate a Payment Schedule. In Figure 26 the Payment Schedule Window shows the 1st semiannual lease payment on 10/11/2003 which is correct. All lease payments are paid in advance.
3. Actual Purchase Option - This is the amount that it would cost the dealer to sell the equipment to the customer at the end of the contract.
4. Quoted Purchase Option - This is the amount that the dealer would charge to sell the equipment in order to make a profit.
5. # of Addt'l Adv. Pmts - This is the number of additional advance payments that are paid on the contract date. This means in addition to the one default advance payment. Placing a value here will move that number of payments from the end of the payment stream to the contract date.
Click the Payment Discount Button and the Lease Payment Discount Programs box, Figure 28, appears:
|At the top of the box is a drop down box, from which the user may select Payment Discount, Payment Discount by Dealer Cost or Payment Discount by Rate.
In the example from Figure 27, above, the dealer wishes to discount the customer payments $917.31. To do so, in the Lease Payment Discount Programs box, Figure 28 above, select the Payment Discount option from the drop down box, enter $917.31 in the Dealer Sponsored Low Rate Pmt Disc (% or $) field and press the Calculate button. The Dealer Cost is calculated as $2,655.91. Press the Apply button if you wish to apply the lower payment to the deal. The result is shown in Figure 29, the payments are reduced to $19,000, and the "implied rate" is adjusted from 3.6% to 2.573%.
8. Compensation - Lease (U.S. Only) – Dealer compensation for a lease can be done one of two ways, increasing the implied lease rate, similar to retail contracts, or increasing the payment, as shown in the following example, Figure 30:
From the Construction example shown above, click on the Compensation button to get the Compensation box, Figure 31, below. Select Payment Add-on Up-front and add $59.16 to the lease payment originally shown. Click Calculate to see the Up-Front Compensation amount of $1,940.72. Click Apply and the new monthly payment amount of $2,875.00 will be applied to the lease deal as shown in Figure 32, below, and the Dealer Compensation will appear in the Cost/Comp summary, Figure 33.
|As with Retail Compensation, based on the Business Line and Contract Type you selected at the top of the calculator, certain compensation options are enabled or disabled, ask your Credit Analyst if you need additional information.||Figure 32.|
Lease with a Trade (Canada Only)
To calculate a lease with a trade select the Details button from the main screen when entering the Amount Financed. Enter the "Selling Price", "Trade Amount" and any other items specific to the lease deal as shown in Figure 34:
When completed, click OK, the "Amount Financed" will appear in the "Amount Financed" Field on the Main Screen, Figure 35, below. After entering all applicable items on the Main Screen click the Calculate Payments button to generate a payment schedule.
Select the first payment by clicking on it then click on the Skip button to the right of the payment schedule. The first payment will be changed to 0 and the remaining payments are adjusted accordingly, as shown below in Figure 36. The trade amount is applied to the first payment and the difference adjusts the lease price.