1. What is Auto Lease Calculation?

Auto lease calculation determines your monthly payments when leasing a vehicle in the UK. It consists of two main components: depreciation and finance fee.

2. How Does the Calculator Work?

The calculator uses these equations:

Where:

• \( Dep \) — Depreciation (£/month)
• \( Fin \) — Finance fee (£/month)
• \( MP \) — Monthly payment (£)
• \( CC \) — Capitalized cost (£)
• \( RV \) — Residual value (£)
• \( T \) — Term (months)
• \( MF \) — Money factor (decimal)

Explanation: The depreciation is the vehicle's value loss divided by lease term. The finance fee is essentially the interest payment on the lease.

3. Importance of Lease Calculation

Details: Understanding lease calculations helps you negotiate better terms, compare deals, and budget accurately for your vehicle expenses.

4. Using the Calculator

Tips: Enter all values in pounds sterling. Money factor is typically provided by the leasing company (e.g., 0.00125). Typical lease terms are 24-48 months.

5. Frequently Asked Questions (FAQ)

Q1: What is capitalized cost?
A: This is the negotiated price of the vehicle plus any additional fees or items being financed in the lease.

Q2: How is residual value determined?
A: The leasing company estimates the vehicle's value at lease end based on make, model, mileage allowance, and term.

Q3: What's a good money factor?
A: Lower is better. To convert to approximate APR, multiply by 2400 (e.g., 0.00125 MF ≈ 3% APR).

Q4: Are there other lease fees?
A: Yes, there may be acquisition fees, disposition fees, and taxes not included in this calculation.

Q5: How does mileage affect the lease?
A: Higher mileage allowances typically decrease the residual value, increasing monthly payments.