A car lease calculator is an easy tool to help you calculate your lease payments by month or even the total cost of the lease. Follow the guide below to learn how to use a car lease calculator one step at a time.
Finding a Car Lease Calculator on the Internet
Online outlets for finding a car lease calculator are not hard to come by. One of the main websites, LeaseGuide.com, provides a link to the lease calculator at the lower part of the page.
Once you have found the car lease calculator you will need to type in your information as indicated by the website.
Because many factors will affect the cost of your lease and monthly payments, you want to be sure to have the correct information. Some of these factors are the negotiated lease price of a vehicle, added leasing costs, suggested retail price, amount of down payments, trade-in, Cap Cost Reductions, residual value of the car, rebates from the manufacturer, interest rates, length of lease, and sales tax. Each of these factors are included in the calculator and luckily it does all the math for you! All the depreciation, finance charges, sales tax, altered cap cost, price of lease agreement, and monthly lease payments are all configured by the car lease calculator.
After you finish putting in all the information you can either print out the results or enter in different values to configure a different result. By playing around with varied numbers it allows you to identify how the monthly payment and total lease cost may differ. This will help you gain knowledge about a lease contract.
Calculating Lease Payments on Auto Loans
A lease payment differs from a monthly auto payment because on the auto payment you end up owning the car. When you lease a car you obtain a residual value which is the estimated car worth when the loan is over. Instead of adding in a zero balance on an auto loan, you basically add in the residual value when determining a lease payment.
An equation consisting of two parts is usually the foundation of a lease payment. To begin the equation, start with the depreciation fee. This is the volume of money in which the car depreciates during the time of your lease and is configured on the extent of miles driven. The number of miles is usually capped. If the cap amount is exceeded, the depreciation fee will then be based per mile thereafter. Next in the equation comes the finance fee. This fee is the amount of interest to be paid on the loan. The total amount between the finance fee and depreciation fee will be the final monthly lease payment. To simplify this, the equations have been written out below.
Depreciation Fee = Purchase Price – Residual Value/Lease Term
Example: Purchase price of $35,000 – Residual Value of $25,000/ 36 month lease = $277.78
You will need to contact the dealer to acquire the money factor for the loan. This is set up in decimal form and is used to calculate interest. With the money factor you can then calculate the finance fee by adding the net cost and residual value and multiplying by the money factor. The net car cost comes AFTER any money that is put down, or trade-in values have been applied.
(Net Car Cost of $35000 + Residual Value of 25,000) X Money factor .00375 = $225
Next, follow the equation below to calculate your monthly lease payment.
Depreciation Fee of $277.78 + Finance Fee of $225= A monthly lease payment of $502.78
Of course, these are just examples. By following these simple equations it is easy to see how simple calculating your monthly auto lease payment can be.