1. What is Vehicle Lease Payment?

A vehicle lease payment consists of two main components: depreciation (the vehicle's value loss during the lease term) and finance charges (the cost of borrowing money). The monthly payment is the sum of these two amounts.

2. How Does the Calculator Work?

The calculator uses these formulas:

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 represents the portion of the vehicle's value you're using during the lease, while the finance charge is essentially the interest payment on the leased amount.

3. Importance of Lease Calculation

Details: Understanding lease calculations helps consumers compare lease offers, negotiate better terms, and budget accurately for vehicle expenses.

4. Using the Calculator

Tips: Enter all required values. Capitalized cost is the negotiated price of the vehicle plus any fees. Money factor can be converted from APR by dividing by 2400 (e.g., 6% APR = 0.0025 MF).

5. Frequently Asked Questions (FAQ)

Q1: What's a good money factor?
A: Lower is better. Typical MF ranges from 0.0010 to 0.0040, equivalent to 2.4% to 9.6% APR.

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

Q3: What's included in capitalized cost?
A: Vehicle price plus any fees or add-ons you choose to finance (not pay upfront).

Q4: Are there other lease fees?
A: Yes, most leases have acquisition fees, disposition fees, and possibly security deposits not included in this calculation.

Q5: How can I lower my monthly payment?
A: Negotiate a lower capitalized cost, higher residual value, longer term, or better money factor. Also consider putting money down (though this isn't always advisable).