1. What is Auto Lease Calculation?

The auto lease calculation determines your monthly payment by accounting for vehicle depreciation and financing costs. It helps you understand the breakdown of your lease payment and compare different lease offers.

2. How Does the Calculator Work?

The calculator uses standard lease formulas:

Where:

• \( Dep \) — Monthly depreciation amount ($)
• \( Fin \) — Monthly finance fee ($)
• \( MP \) — Total monthly payment ($)
• \( CC \) — Capitalized cost (vehicle price after discounts)
• \( RV \) — Residual value (vehicle value at lease end)
• \( T \) — Lease term in months
• \( MF \) — Money factor (lease interest rate expressed as decimal)

Explanation: The depreciation is the value you "use up" during the lease, while the finance fee is essentially the interest charge.

3. Importance of Lease Calculation

Details: Understanding these calculations helps you negotiate better lease terms, compare offers from different dealers, and budget accurately for your vehicle expenses.

4. Using the Calculator

Tips: Enter all values in USD. Money factor is typically provided by the dealer (divide APR by 2400 to convert to MF). Residual value is often expressed as a percentage of MSRP.

5. Frequently Asked Questions (FAQ)

Q1: What's a good money factor?
A: Money factors vary but generally below 0.0020 (equivalent to ~4.8% APR) is considered good for prime credit.

Q2: How is residual value determined?
A: Manufacturers set residuals based on projected depreciation. Higher residuals mean lower payments.

Q3: Can I negotiate the capitalized cost?
A: Yes, you can negotiate the vehicle price just like when purchasing, which lowers your CC.

Q4: What's included in the monthly payment?
A: Typically covers depreciation and finance charges. Taxes, fees, and insurance are usually extra.

Q5: How does lease term affect payments?
A: Longer terms mean lower monthly payments but higher total cost due to more interest paid.