1. What is Car Loan/Lease Calculator?

This calculator helps you estimate monthly payments for either a car lease or a car loan. It uses standard financial formulas to calculate your expected monthly payment based on the terms of your agreement.

2. How Does the Calculator Work?

The calculator uses different formulas for leases and loans:

Where:

• Lease Terms:
  • Dep — Depreciation ($/month)
  • Fin — Finance fee ($/month)
  • MP — Monthly payment ($)
  • CC — Capitalized cost ($)
  • RV — Residual value ($)
  • T — Term (months)
  • MF — Money factor (decimal)
• Loan Terms:
  • MP — Monthly payment ($)
  • P — Principal ($)
  • r — Monthly interest rate (decimal)
  • n — Term (months)

3. Importance of Payment Calculation

Details: Understanding your monthly payment helps with budgeting and comparing different financing options. Leases typically have lower monthly payments but you don't own the vehicle at the end.

4. Using the Calculator

Tips: For leases, you'll need the negotiated price, residual value, lease term, and money factor. For loans, you'll need the loan amount, interest rate, and loan term.

5. Frequently Asked Questions (FAQ)

Q1: Should I lease or buy?
A: Leasing offers lower payments and frequent upgrades, while buying builds equity. Consider your driving habits and financial goals.

Q2: How is money factor related to interest rate?
A: Money factor × 2400 ≈ equivalent annual interest rate. For example, 0.0025 MF ≈ 6% APR.

Q3: What's a good residual value percentage?
A: Typically 50-60% of MSRP after 3 years, but varies by vehicle and lease term.

Q4: How does down payment affect calculations?
A: For loans, it reduces principal. For leases, it reduces capitalized cost but isn't recommended as you don't get it back if the car is totaled.

Q5: Are there other fees not included here?
A: Yes, both loans and leases may have acquisition fees, documentation fees, taxes, and other charges not reflected in this basic calculation.