1. What is Lease To Own Calculation?

The lease to own calculation helps determine the monthly payments for semi-trucks under a lease-to-own agreement. It breaks down the payment into depreciation and finance components.

2. How Does the Calculator Work?

The calculator uses these 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 value loss over the term, while the finance fee represents the cost of borrowing.

3. Importance of Lease To Own Calculation

Details: Understanding these calculations helps trucking professionals evaluate lease-to-own agreements, compare financing options, and budget accurately for equipment costs.

4. Using the Calculator

Tips: Enter the truck's capitalized cost, estimated residual value, lease term in months, and the money factor (typically provided by the lessor). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is capitalized cost?
A: This is the negotiated price of the truck plus any additional fees that are being financed.

Q2: How is residual value determined?
A: The lessor estimates the truck's value at lease end based on age, mileage, and condition.

Q3: What is a typical money factor?
A: Money factors typically range from 0.001 to 0.004 (equivalent to 2.4% to 9.6% APR).

Q4: Are there other fees not included here?
A: Yes, this doesn't include taxes, insurance, or maintenance costs which may be additional.

Q5: How does this compare to straight financing?
A: Lease-to-own often has lower monthly payments but may cost more overall compared to traditional loans.