How to Calculate Finance Charges on a Leased Vehicle
Before you lease a vehicle, determine how much it will cost and how the finance charges might affect the type of vehicle you can lease. Doing your homework can help you save money. You don't want to get into a deal solely on what the salesperson tells you.
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Instructions
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Determine the lease term. It's best to know if you want a 2-year, 3-year or 5-year car lease. The leasing terms may vary from dealer to dealer, but have a fixed term in your mind. For calculation purposes, convert the annual lease term into months.
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2
Guesstimate the car's residual value. The residual value is the vehicle's value at the end of the lease. If the residual value is high, then the monthly payments will be lower. Conversely, if the residual value is low, the monthly payments will be higher. This figure may not be easy for you to determine, but do the best you can.
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Pin down an interest rate. Shop around to see what interest rates dealers are offering on leased cars. It will help you to calculate your estimated finance charges.
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Estimate the annual mileage. Of course this number is an approximation, but try to be as accurate as possible. In order to use the mileage when calculating the lease finance charge, this number should be an annual figure and not the total accumulated mileage over the term of the lease.
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Build in an acquisition fee. The acquisition or administrative fee covers the leasing company for all administrative charges. Charges such as pulling credit reports, confirming insurance and other administrative tasks. This might be a bit tough to estimate. You can call around to find out what a few dealers are charging.
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Remember to include the security deposit. In order to lease the vehicle, you have to put down a security deposit. Even though you have not leased the vehicle as yet, come up with a pretty accurate down payment amount to help calculate the finance charges.
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Find an online leased vehicle calculator. Plug in your numbers to see what you can get for your money.
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Tips & Warnings
Websites such as Edmunds.com and Calculator.com have vehicle lease calculators that will calculate the finance charges on your leased vehicle.
With online leased vehicle calculators, you can play around with the numbers to see how much you can afford and how the finance charges affect the type of vehicle you can lease.
