1. What is Lease To Own Car Payment?

A lease to own car payment consists of two components: depreciation (the value the car loses during the lease) and finance charges (the cost of borrowing the money to lease the car). 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 paying for, while the finance charge is essentially the interest on the lease.

3. Importance of Lease Calculation

Details: Understanding these calculations helps you negotiate better lease terms, compare different lease offers, and budget accurately for your vehicle expenses.

4. Using the Calculator

Tips: Enter all values in the specified units. The money factor is typically provided by the dealer (divide the APR by 2400 to convert to money factor).

5. Frequently Asked Questions (FAQ)

Q1: What's a good money factor?
A: Money factors typically range from 0.0010 to 0.0040. Lower is better (equivalent to 2.4% to 9.6% APR).

Q2: How is residual value determined?
A: The leasing company sets the residual based on the vehicle's expected value at lease end, typically 50-60% of MSRP for a 36-month lease.

Q3: Can I negotiate the capitalized cost?
A: Yes, this is the purchase price of the vehicle and can often be negotiated below MSRP.

Q4: What's included in the capitalized cost?
A: It includes the vehicle price plus any fees or add-ons you choose to finance, minus any down payment or trade-in value.

Q5: Are there other lease fees?
A: Yes, leases often have acquisition fees, disposition fees, and possibly security deposits not included in this calculation.