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How Do I Calculate Monthly Lease Payments?
How to Calculate Monthly Lease Payments
Step 1: Calculate the Capitalized Cost
To calculate a vehicle's capitalized cost, take its selling price subtract your down payment.
Step 2: Calculate Your Vehicle's Residual Value
To calculate your vehicle's residual value, multiply its full MSRP (note some banks will only allow consumers to residualize certain options or will place a cap on the amount of money that can be residualized for each option) times its residual value percentage. The residual value percentage is determined by the bank that you are leasing through.
Step 3: Determine Your Vehicle's Total Depreciation
To determine your vehicle's depreciaiotn, subract its residual value from your capitalized cost.
Step 4: Determine Your Vehicle's Monthly Depreciation
To figure out your car or truck's monthly depreciation, divide the total depreciation that you just calculated by the number of months that you are going to lease it for.
Step 5: Determine Interest Charges
To determine the interest portion of your monthly lease payment add your vehicle's capitalized cost and its residual value and then multiply the result times your bank's lease money factor.
Step 6: Calculate Monthly Payment
Finally, add the results from Step 4 (the monthly depreciation) and Step 5 (the monthly interest charge) to come up with your pre-tax monthly lease payment.
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