1. What is the Lease Trade In Value Calculator?

The Lease Trade In Value Calculator helps determine the capitalized cost (CC) of a vehicle lease by accounting for the manufacturer's suggested retail price (MSRP), any applicable discounts, and the value of a trade-in vehicle.

2. How Does the Calculator Work?

The calculator uses the lease trade-in formula:

Where:

• \( CC \) — Capitalized cost ($)
• \( MSRP \) — Manufacturer's suggested retail price ($)
• \( discount \) — Any applicable discounts ($)
• \( trade \) — Trade-in value of current vehicle ($)

Explanation: The equation calculates the net capitalized cost by subtracting discounts and trade-in value from the MSRP.

3. Importance of Capitalized Cost Calculation

Details: The capitalized cost is a key factor in determining monthly lease payments. A lower capitalized cost typically results in lower monthly payments.

4. Using the Calculator

Tips: Enter the vehicle's MSRP, any applicable discounts, and your trade-in value. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What exactly is capitalized cost in a lease?
A: Capitalized cost is the negotiated price of the vehicle that serves as the basis for calculating lease payments, after accounting for discounts and trade-ins.

Q2: How does trade-in value affect my lease?
A: A higher trade-in value reduces your capitalized cost, which can lower your monthly lease payments.

Q3: Should I negotiate MSRP or capitalized cost?
A: You should negotiate both. Start with the MSRP, then negotiate any discounts or trade-in values to lower the capitalized cost.

Q4: Are there other factors that affect lease payments?
A: Yes, residual value, money factor (interest rate), and lease term also significantly impact monthly payments.

Q5: Can I use this calculator for any vehicle lease?
A: Yes, this calculation applies to all vehicle leases, though some luxury brands may have additional fees or charges.