1. What is Lease Car Payment?

A lease car payment consists of two main components: depreciation (the vehicle's value loss during the lease term) and finance charge (the cost of borrowing the money to lease the vehicle). The sum of these two components gives your monthly lease payment.

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 is the vehicle's value loss spread over the lease term, while the finance charge is based on the total amount financed (capitalized cost plus residual value) multiplied by the money factor.

3. Importance of Lease Calculation

Details: Understanding how lease payments are calculated helps you negotiate better terms, compare lease offers, and make informed decisions about vehicle leasing.

4. Using the Calculator

Tips: Enter the negotiated vehicle price (capitalized cost), estimated residual value, lease term in months, and the money factor provided by the leasing company. All values must be positive numbers.

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 you're rolling into the lease.

Q2: What is residual value?
A: The estimated value of the vehicle at the end of the lease term, set by the leasing company.

Q3: How do I convert APR to money factor?
A: Divide the APR by 2400 (e.g., 6% APR = 0.0025 money factor).

Q4: What's a good money factor?
A: Money factors vary, but generally below 0.0020 is good for prime credit customers.

Q5: Can I negotiate the money factor?
A: Typically no, as it's based on your credit score, but you can sometimes get better rates through manufacturer subvented leases.