1. What is a Lease Calculator?

The Lease Calculator computes monthly payments for a 24-month vehicle lease by breaking down the depreciation and finance components. It helps compare lease offers and understand payment structure.

2. How Does the Calculator Work?

The calculator uses these lease equations:

Where:

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

Explanation: The depreciation is the vehicle's value loss over the lease term, while the finance fee is essentially the interest charge based on the money factor.

3. Importance of Lease Calculation

Details: Understanding these components helps negotiate better lease terms, compare different offers, and identify where costs are coming from in your monthly payment.

4. Using the Calculator

Tips: Enter the negotiated vehicle price (capitalized cost), the lease-end residual value, and the money factor (often provided as 0.00XXX). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How do I find the money factor?
A: The money factor is typically provided by the leasing company. It may be shown as a small decimal (e.g., 0.00125) or as an interest rate equivalent (multiply by 2400).

Q2: What's a good money factor?
A: Lower is better. Rates vary but generally below 0.00200 (equivalent to ~4.8% APR) is considered good.

Q3: How is residual value determined?
A: The leasing company sets this based on the vehicle's expected value after the lease term, typically as a percentage of MSRP.

Q4: Can I negotiate the capitalized cost?
A: Yes, this is the purchase price of the vehicle and can often be negotiated below MSRP.

Q5: Why 24 months in the calculation?
A: This calculator is specifically designed for 2-year (24-month) leases. Different terms would require adjusting the depreciation divisor.