1. What is Lease To Own Vehicle Payment?

The lease-to-own vehicle payment consists of two main components: depreciation (the value the car loses during the lease) and finance fee (the cost of borrowing the money). The monthly payment is the sum of these two components.

2. How Does the Calculator Work?

The calculator uses the lease payment equations:

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 using up each month, while the finance fee is essentially the interest charge.

3. Importance of Lease Payment Calculation

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

4. Using the Calculator

Tips: Enter all values as positive numbers. The money factor is typically a small decimal (e.g., 0.00125 which equates to 3% APR). The residual value is the estimated value of the car at lease end.

5. Frequently Asked Questions (FAQ)

Q1: How is money factor related to interest rate?
A: Money factor can be converted to approximate APR by multiplying by 2400 (e.g., 0.00125 MF = 3% APR).

Q2: What's a good residual value percentage?
A: Typically 50-60% of MSRP for a 36-month lease, but varies by vehicle and market conditions.

Q3: Can I negotiate the capitalized cost?
A: Yes, this is the purchase price of the vehicle and is negotiable just like when buying.

Q4: Why add CC and RV in the finance calculation?
A: This approximates the average amount financed over the lease term.

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