How to Calculate an Automobile Lease
An automobile lease gives you an opportunity to have the use of a car without actually purchasing it. Your payments are based on the salvage value and as well as other terms and conditions. To calculate an automobile lease you will need an online auto lease calculator. When you have all of the information entered into the calculator you will be able to see if it leasing is the best option for you. When the lease is over you have an opportunity to purchase the car or turn it in and lease or purchase another car.
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Instructions
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Enter all of the terms and conditions of the automobile into the auto lease calculator. You will need the manufacturers suggested retail price. This is also known as the sticker price listed on the automobile. This price will not include fees, taxes, and other non-equipment options. You will also need the base cap cost which is the price agreed upon between you and the dealer during the negotiation. Enter the data and hit the next button.
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Find out if there are any additional costs. Some other costs could include a luxury tax, insurance, and an extended warranty fee. If you plan to finance up-front sales taxes with the lease these should be entered into the calculator as well. The balance owed on any trade-in should be included as well according to the Leasing Guide. Key in the information and hit the next button.
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Review your down payment amount as well as the value of your trade-in. You will also need any type of rebate that may have been offered by the manufacturer. There is a place for this information to be entered in the calculator and then hit the next button.
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Take a look at your adjusted net capitalized cost. This is the amount your lease payment will be calculated from; it is calculated after all of the previous information has been entered.
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Enter your residual value. The residual value is the value of the car at the end of the lease. This amount is usually set by the leasing company according to Lease Guide. If you want to get a lower lease payment then this amount will have to be higher. Enter your money lease factor from the leasing company. Now put the number of months your lease will be for into the calculator. You will need the rate of sales tax in your state.
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Tips & Warnings
Notice the residual value is determined at the beginning of the lease. Dealers can use historical information from previous lease contracts to determine the residual value. There is flexibility when it comes to the residual value.
References
- Photo Credit for sale or lease image by Keith Frith from Fotolia.com
