1. What is Equipment Lease Calculation?

The UK equipment lease calculation determines monthly payments by combining depreciation and finance charges. It's commonly used for business equipment financing agreements in the United Kingdom.

2. How Does the Calculator Work?

The calculator uses standard UK lease 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 equipment's value loss over time, while the finance charge covers the cost of borrowing.

3. Importance of Lease Calculation

Details: Accurate lease calculations help businesses budget effectively, compare financing options, and understand the true cost of equipment leasing.

4. Using the Calculator

Tips: Enter all values in GBP. The money factor is typically provided by the leasing company (convert APR to MF by dividing by 2400).

5. Frequently Asked Questions (FAQ)

Q1: What's included in capitalized cost?
A: CC includes equipment price, taxes, fees, and any additional accessories or services bundled in the lease.

Q2: How is residual value determined?
A: RV is the estimated equipment value at lease end, set by the leasing company based on expected depreciation.

Q3: What's a typical money factor?
A: MF varies by creditworthiness and market conditions, but common range is 0.0015 to 0.004 (equivalent to 3.6%-9.6% APR).

Q4: Are there additional lease fees?
A: Some leases may have acquisition fees, documentation fees, or excess mileage/wear charges not included in this calculation.

Q5: Can I negotiate lease terms?
A: Yes, CC, RV, and MF may be negotiable depending on the leasing company and your credit standing.