Progressive Lease To Own Payment Calculator

Progressive Lease To Own Payment Formulas:

\[ Dep = (CC - RV) / T \] \[ Fin = (CC + RV) \times MF \] \[ MP = Dep + Fin \]

Capitalized Cost (CC):

Residual Value (RV):

Term (T):

months

Money Factor (MF):

decimal

Depreciation (Dep):

Finance Fee (Fin):

Monthly Payment (MP):

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1. What is Progressive Lease To Own Payment?

Progressive lease to own payment is a financial arrangement where monthly payments consist of two components: depreciation (the value lost during the lease term) and finance charges (the cost of borrowing). This calculator helps determine the monthly payment amount.

2. How Does the Calculator Work?

The calculator uses these formulas:

\[ Dep = (CC - RV) / T \] \[ Fin = (CC + RV) \times MF \] \[ MP = Dep + Fin \]

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 asset's value you're using each month, while the finance charge is the cost of financing that usage.

3. Importance of Lease Payment Calculation

Details: Understanding these calculations helps consumers compare lease offers, budget effectively, and make informed financial decisions about leasing versus buying.

4. Using the Calculator

Tips: Enter the capitalized cost (price of the item), residual value (estimated value at lease end), lease term in months, and money factor (provided by the lessor). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How is money factor different from interest rate?
A: Money factor is a decimal version of the interest rate (divide APR by 2400 to get MF). For example, 6% APR = 0.0025 MF.

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

Q3: Can I negotiate the money factor?
A: Yes, money factors are often marked up by dealers. You can negotiate this just like an interest rate.

Q4: Why add CC and RV in the finance calculation?
A: This accounts for the fact you're financing both the depreciation amount and the residual value during the lease term.

Q5: Are there other fees not included in this calculation?
A: Yes, leases often have acquisition fees, disposition fees, and taxes that aren't reflected in this basic calculation.