ArStL

Is there simple, clean lease calculator to use for informational purposes prior to going into dealership?

I'm guessing that with a negotitated purchase price, residual value and money factor, I should be able to estimate(?) monthly payments.

Does that sound right?

Thanks for input.

ghbmd

I like this one http://www.leaseguide.com/calc.htm.
You need the MSRP, negotiated price, RV, and MF, plus your local tax rate if you want to include that. The best lease calculator is this way of doing it manually (see below). It came out exactly to the penny when I used it to calculate my lease. Also, nice iPhone app called iLease which was pretty accurate.

OK - Are you ready? Great....Here we go!



1. You first need to start the process of finding out how much of the vehicle you're going to be "borrowing" - in other words, what is it going to be worth in 36 months. For our example, this car has a Sticker Price (MSRP) of $25,000 and a 36 month Residual Value of 55%. So, we take the MSRP of $25,000 and multiply it by 55% - which equals $13,750.
2. Whether you've already gotten a Sale Price or not, now's the time to get the best price you possible can - spend a few minutes and learn how to get the best car prices with just a click of your mouse. We've already done that with this scenario - our Sale Price is $22,145. This is known as the Capitalized Cost, or Cap Cost, and includes any fee's that are part of the Car Lease. Subtract the $13,750 Residual value we got earlier and that leaves $8,395.

This amount is known as the Net Capitalized Cost. Remember to subtract any and all rebates, incentives and cash/trade amounts if they apply - it will make the Net Capitalized Cost even lower. In this example, there are no additional amounts to subtract so our Cap Cost is $8,395 - the Amount we are "borrowing" for our Car Lease.
3. Take the $8,395 and divide it by 36 months - yep, the term of our lease - 36 months/3 years. That equals $233.19 a month for 36 months. THIS is not the total of your payments - we have a couple of more steps before we get that figure.
4. We now have to figure the "Interest" you're going to pay for "borrowing" that car or truck. Take the $22,145 (capitalized cost) and add the Residual Amount of $13,750 to it. That figure is $35,895. Yes, I know this is a wacked-out formula and doesn't make much sense, yet that's how it's done.

Take that $35,895 and multiply it by the Money Factor of .0025 that we got earlier and we have an amount of $89.74.
5. Add the $233.19 it will take to "borrow" the car and $89.74 in "Interest" and we get a total of $322.93 a month for 36 months. Now there is only 1 step left - Sales Tax, and that is treated a bit differently that a Finance or Cash Transaction.
6. The Sales Tax is treated a bit differently that a Finance or Cash Transaction. Let's say we live in Indiana and the Sales Tax is 6% State-Wide. We take the $322.93 and multiply that by the 6% Sales Tax - which equals $19.38.

Add the $19.38 Tax to the $322.93....and your total monthly payment will be $342.31 a month for 36 months

That wasn't so hard, was it.







OK - Here's a quick-and-dirty review.....with less talk!



1. The MSRP of the Vehicle = $25,000
2. Which is multiplied by the 36 month Residual Percentage of 55% = $25,000 X 55%
3. Which equals the Residual Value = $13,750
4. Total Sale Price of the Vehicle (the capitalized cost) = $22,145
5. Subtract Line 3 (the Residual Value of $13,750) from Line 4 (the Capitalized Cost of $22,145)
6. Which equals the amount you're 'borrowing" aka as the Depreciation = $8,395
7. Divide Line 6 (the Depreciation amount) by the lease term = 36 months
8. Which equals the Depreciation payment to be made monthly for 36 months = $233.19
9. Add Line 4 (the net capitalized cost) and Line 3 (The Residual Value) = $22,145 + $13,750 = $35,895
10. Multiply Line 9 by the Money Factor of .0025 to calculate the "interest" owed - $35,895 X .0025 = $89.74
11. Add line 8 (the monthly depreciation amount) and Line 10 (the Interest) - $233.19 + $89.74 = $322.93 a month
12. Multiply the Total from Line 11 by the total tax assessment for your area - i.e. - $322.93 X 6% Sales Tax = $19.38
13. Add line 12 (the Sales Tax Assessment) to line 11 - $19.38 + $322.93 = $342.31....this is your Total Payment For each of the next 36 months!



A couple of things to remember about car leases. Like any loan instrument, money down will lower your monthly payment. However, your goal on a car lease is to pay as little as possible up-front. After all, you're only "borrowing" the vehicle. Try to spend only $500 - $1500 up-front on a lease - no matter what the Ad's say or what the Dealers tell you. You can structure a Car Lease any way you like.

Remember, calculating a Lease is very simple and only takes a few moments. So do yourself a favor and "punch a calculator" - find out what a Car Lease might be each month.

Oh...one more thing. That same car, at the same Sale Price of $22,145 plus Sales Tax of 6% financed for 60 months at 6% would be $417 a month - $74.69 A Month More than the Lease.

Savings gained on leasing versus buying over that 36 months - $2,688.84.

Vacation anyone?

ArStL

2 main points:

1) Damn, you must do this for a living.
2) Thank god for calculators.

Thanks much for input. Really appreciated.

drrick89

Matt, Prestige also gets: 19" trispokes & auto-dimming exterior mirrors, but since you're getting the 19" Titanium sport package, we'll scratch the trispokes. But, the Titanium is $1050 in the Prem+, while it's only $400 in Prestige - so the $650 savings would make Prestige just $1600 extra. Are the auto-dimming mirrors, backup camera, advanced key, and memory seats worth $1600? You betcha. But, that would translate to about $50 extra for the life of your lease; which may not be worth it to you.

As for the negotiating, $1000 off MSRP is pretty bad, depending on where you live. Heck, in late 2009 I got close to 4K off MSRP. But, don't even go there! Instead, start with $1000 over invoice & see how close to that you can get!

brocken

Thanks for breaking that down ghbmd. The calculators make it easy if you're in a hurry but it's nice to understand the math behind the scenes.

ghbmd

Wish I could take credit for the manual way of doing the lease calculation, but I cannot. I found it online years ago and have saved it ever since. I can confirm however that it works and is accurate. And I don't do this for a living- really it seems I do it once every 36 months when my lease is up and I'm getting into a new car.

Rizzo5150

Thanks. This is really helpful....