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How Do I Calculate Monthly Lease Payments?

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    tidestertidester Member Posts: 10,059
    Golic hasn't been around for a while but this may help: Simple Car Finance Calculations - Auto Loan & Lease Payments

    tidester, host
    SUVs and Smart Shopper
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    bcballer007bcballer007 Member Posts: 1
    I was wondering if i could get a copy of that lease calc.

    Thanks.
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    lymplymplymplymp Member Posts: 1
    Can you send me a copy of how to calculate lease payments

    Thanks!
    Lymplymp
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    izzydogizzydog Member Posts: 9
    can i get your spreadsheet?

    THanks
    mikemetzger1973@yahoo.com
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    leyla27leyla27 Member Posts: 3
    We agreed to lease a 2009 VW CC Sport Automatic. MSRP is 28995. Only money down only is $685, but they are paying our last VW pymt ($500) from our previous lease and waiving our $350 turn in fee. They calculated our pymt to be 525 for 36 months... Is this good or bad? I tried calculating myself, but am totally confused.
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    grandtotalgrandtotal Member Posts: 1,207
    You need at least one more piece of information, either the residual or the interest rate (money factor). It would also help to know how many miles you are contracting for.
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    leyla27leyla27 Member Posts: 3
    12K/year...does the dealer have to disclose the money factor if I ask? Or residual value if I ask?
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    grandtotalgrandtotal Member Posts: 1,207
    No, the dealer doesn't have to disclose the money factor used - but you don't have to buy from them either! See this article

    If they won't supply the money factor ask them for the residual. With that you can calculate the money factor.
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    leyla27leyla27 Member Posts: 3
    Dealer changed the terms to 15K/year. The MSRP is $28995. The residual value is $16,504 and the money factor is .0035 which I know is 8.4%. I live in PA. He is asking no money down, just tags, they will pay my first lease payment of $509. This is a lease for 39 months. They are paying my last lease payment of $504 on our expiring lease. They are cancelling the $350 turn in fee. Do you think this is a good deal?
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    fordfoolfordfool Member Posts: 240
    > Do you think this is a good deal?

    The monthly lease payment is correct for the information that you have provided assuming that the 6% state sales tax is included in the $509 monthly payment. Car lease calculators can be found online:
    link title

    Note that even though the payment was lowered from $525 to $509, you will be paying an extra $951 because of the three extra payments. Of course, you will also have the car for three more months.

    Even though you are leasing rather than buying the car, you are still able to negotiate the price down from MSRP. You'll see this in the online calculations. This dealer has you paying full pop.

    The dealer isn't doing you any favors with an 8.4 % interest rate. Aim at least two percent less. You probably know that the money factor times 2400 equals the yearly APR equivalent.
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    steve777steve777 Member Posts: 41
    My understanding is that in NJ you only pay tax on the lease payment, not cap cost.

    My question is thius, is tax figured only the depreciation portion of the lease payment or the depreciation + interest (the entire monthly lease payment)

    Thanks
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    volvomaxvolvomax Member Posts: 5,238
    Tax is figured on the entire lease payment.
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    kyfdxkyfdx Moderator Posts: 239,325
    NJ used to charge tax just on the depreciation... Now, it's the total of the lease payments..

    But, in both cases, the total amount collected is upfront... Of course, you can add it to your CAP cost and the bank will pay it for you.

    regards,
    kyfdx

    Edmunds Price Checker
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    jake011399jake011399 Member Posts: 1
    Would very much appreciate the lease spreadsheet.

    Thanks in advance

    Jake
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    rjbarraganrjbarragan Member Posts: 1
    Golic,

    Can you please send me your spreadhseet? I am still a bit hazy on how the whole leasing process works. I only have 1 dealership in my city, (El Paso, TX) and I think I would get a better deal in Dallas. I plan on going there for a game in December.

    Thnaks for your help!

    Please tell me about your experience.
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    pammydpammyd Member Posts: 3
    Hi Golic,

    I too would love a copy of the spreadsheet. the dealers have been trying to rip me off... maybe because i am a woman. But I would really like to go shopping well prepared.

    Many thanks.
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    Kirstie_HKirstie_H Administrator Posts: 11,150
    Folks, that post was made nearly 3 years ago, and I don't believe that member is around anymore.

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    michaellnomichaellno Member Posts: 4,120
    If you are excel literate, you can create your own spreadsheet

    (I'll expect the experts to proof my work and make any corrections if necessary)

    Here are the cell labels and their contents:

    MSRP - Sticker price of the car, in dollars (cell A1, B1)
    Cap Cost - Selling price of the car, in dollars (cell A2, B2)
    Residual percentage - residual percentage at end of least (cell A3, B3)
    Residual value - cell B1 * cell B3 (cell, A4, B4)
    Term (months) - how long is the lease for? Answer in months - 24, 36, etc. (cell A5, B5)
    Money Factor - money factor, as a decimal value (.0002) (cell A6, B6)
    Pct Rate - cell B6 * 2400 (cell A7, B7)

    Depreciation Amt / Month - cell B2 minus cell B4, divided by cell B5 (cell A8, B8)
    Interest Amt / Month - cell B2 minus cell B4, multiplied by cell B6 (cell A9, B9)
    Pre tax Payment - cell B8 plus cell B9 (cell A10, B10)
    Tax Rate - entered as a percentage (7.5%) (cell A11, B11)
    Tax Amount - cell B10 multiplied by cell B11 (cell A12, B12)
    Full Monthly Pmt - cell B10 plus cell B12 (cell A13, B13)

    Cell B13 would be the full monthly payment, with tax

    (note - for states like Illinois and Texas, the above formula won't work, as the tax is applied to the whole vehicle, not just the depreciated amount)

    Edit away!
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    tidestertidester Member Posts: 10,059
    Thanks, Michael! (No, I didn't proof it.)

    tidester, host
    SUVs and Smart Shopper
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    joel0622joel0622 Member Posts: 3,299
    the money factor times 2400 equals the yearly APR equivalent.

    Didn't know that
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    kyfdxkyfdx Moderator Posts: 239,325
    Now.. you just have to figure out WHY? ;)

    Edmunds Price Checker
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    fordfoolfordfool Member Posts: 240
    >>> the money factor times 2400 equals the yearly APR equivalent.

    >> Didn't know that

    > Now.. you just have to figure out WHY?

    Interest rates are expressed as a yearly percentage, but are computed as a decimal, i.e. divide by 100. 6% = .06

    Interest is compounded monthly, so divide by 12.
    6% yearly interest = 6 / (100 X 12) = .005 monthly interest.

    Because a part of the loan is being paid back each month, the average amount owed over the term of the loan is one-half of the amount financed (divide by 2).

    So 6% = 6 / (100 X 12 X 2) = 6 / 2400 = .0025 = money factor.

    The customer confusion factor doesn't hurt from the dealer's point of view either.
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    joel0622joel0622 Member Posts: 3,299
    Ya beat me to it. :D

    I used to be able to pencil whip a lease by hand with the best of them. A customer could ask me what a payment would be and I could flip a buyers order and figure it quicker then a cat can lick its butt.

    Now you could hold a gun to my head and I could not figure one by hand :shades: :D

    Probably because over the last 5 years we have gone from doing 75 leases a month to maybe 1 a month.
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    grandtotalgrandtotal Member Posts: 1,207
    Probably because over the last 5 years we have gone from doing 75 leases a month to maybe 1 a month.

    Really? I'd have thought it would be the complete opposite, people trying to reduce their monthly outgoings.
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    joel0622joel0622 Member Posts: 3,299
    Hell Ford is the only Domestic that still has a leasing program. We were not as dumb as the other two to come out and say. "We think so little of our own product we won't lease it to you because we are afraid of the lease end value" We just simply adjusted our lease program so the Residual Value makes sense. In the end it makes buying more attractive. Especially with all the 0% money flying around these days.
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    grandtotalgrandtotal Member Posts: 1,207
    Getting the residual value correct is a smart idea. If they really have that right then why not apply some of that 0% interest budget that they have to leasing and give the consumer a choice? Maybe they are a little scared of even their revised residuals?

    Our latest car (11 months ago) was leased (first time ever for us) and we did that because we wanted someone else to underwrite the residual.
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    kyfdxkyfdx Moderator Posts: 239,325
    All correct, except this part...

    Because a part of the loan is being paid back each month, the average amount owed over the term of the loan is one-half of the amount financed (divide by 2).


    You are paying finance charges on an average of the CAP cost + residual, but in the formula, they are added together... The division by 2 gets you the average..
    (CAP cost + residual) / 2

    regards,
    kyfdx

    Edmunds Price Checker
    Edmunds Lease Calculator
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    joel0622joel0622 Member Posts: 3,299
    Maybe they are a little scared of even their revised residuals?

    What makes you say that????

    Perception and dealer greed killed leasing. I can find 3000 post on this board alone where people talk about calling it fleecing. Publications advise against it, and dealers took a good thing and took advantage of it.

    Ford by the way was the first manufacture to go to a fully disclosed lease contract years before the guv ever called for it.
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    grandtotalgrandtotal Member Posts: 1,207
    What makes you say that????

    Well, if Ford have their residuals correct (not an easy thing to do) then they could afford to grant 0% leases in exactly the same way as they can 0% loans. Maybe the reason they don't is because they are not totally sure of their residual numbers. I realise you can never be certain, but to say a 99% confidence level.

    I personally feel that leasing is a perfectly legitimate was to get the use of a vehicle for a period, I have no need to "own" the car I drive. So long as you can drive a financial calculator there is no need to fear "fleecing".
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    giannvgiannv Member Posts: 1
    Golic,
    can you please email me the spreadsheet you prepared. thanks
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    golicgolic Member Posts: 714
    Ok everyone - I am around again, if you need the spread sheet, drop me an email or post a reply.

    good luck!! Please let me know of any corrections.

    Golic
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    golicgolic Member Posts: 714
    Your email is set to private ginny. So let me know what it is and I will send.
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    NA_MomNA_Mom Member Posts: 6
    Golic,
    I am prepping to lease a new car. Please forward me the spreadsheet. Thanks so much!
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    tidestertidester Member Posts: 10,059
    Your community profile has a setting to make your email address visible ("public"). Use the "Community Profile" link at the top of this page (right side) to make the change if you would like to allow other members to have access to your email address. That way you don't have to publish your email address in the Forums and only members have access to it.

    tidester, host
    SUVs and Smart Shopper
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    NA_MomNA_Mom Member Posts: 6
    Golic (and Host) -
    I am trying to send you my e-mail address so you can send me your spreadsheet but I have been unable to figure out how. Any tips? I prefer not to set my e-mail address to "public" on my account...

    Thanks!

    NA_Mom
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    toyoman8toyoman8 Member Posts: 114
    I don't know how to send you an e-mail can you just send it to me please.
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    golicgolic Member Posts: 714
    I would be more than happy to send anyone the schedule. However, I can not send it, unless I know your email address.

    If you go into "your account" and unclick the keep email private. I will then have a means of emailing you the spreadsheet.

    Or the other option would be to post your email, which carries the risk of SPAM.

    be well-
    Golic
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    Kirstie_HKirstie_H Administrator Posts: 11,150
    OK, the deal is that you are asking "golic" to do you a favor - it's not really fair to make him work harder to get your contact info. If you make your email address public in your profile, NO ONE can see it apart from registered members. When you've received the email, you can make it private again.

    If you post your email address here instead, you are exposing yourself to spambots picking up your address.

    MODERATOR /ADMINISTRATOR
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    NA_MomNA_Mom Member Posts: 6
    Golic,
    Just checked back in to the forum. I am setting my e-mail to public so you can send me the spreadsheet. Thank you for your help! Sorry for the confusion.

    NA_Mom
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    djo1113djo1113 Member Posts: 3
    Golic,

    Could you please forward your spreadsheet? I really appreciate your help.

    Thanks!
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    PoehlerPoehler Member Posts: 3
    I've never leased a vehicle before and was wondering if anybody could give me some tips to save as much money as possible. I've got a quote on a ex-l for $31081 (msrp $35,500) and with $6000 down, the payment would be $302.36 for a 39 month lease with 12,000 mile a year. Does this seem like a good deal?
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    Kirstie_HKirstie_H Administrator Posts: 11,150
    Hi - I see you already found the Honda Pilot Lease Questions discussion - that's the best place to check for lease info on this specific vehicle.

    MODERATOR /ADMINISTRATOR
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    golicgolic Member Posts: 714
    Poehler-

    Here is my advice on leasing. My personal belief is leasing is best suited for the person who can write off the lease payments for business purposes. For the casual consumer if you are considering leasing for financial reasons of a lower payment, then I would steer you to find a less expensive car. Find a car you can afford, pay it off in 3-5 years and drive it for 6-7 years. It makes the best economic sense.

    Key things on leasing. One, make sure you can adhere to the mileage limit. You will pay more monthly to get a lease with a 15K allowance, but that increase in monthly payment is far less than if you were to bring in the car with over mileage and have to pay 15-25 cents per mile.

    Second, if you have kids or this is the primary family vehicle. Consider that you are responsible for any damage that exceeds normal wear and tear. Cars are just more prone to dings, dents, and damages when shuttling kids around and parking at barks, rinks and ball yards.

    Finally, remember. Unlike a purchase you are committed to making those payments over 39 months. You are stuck with this vehicle for 39 months, even if you lose your job, drop in income etc...unlike a car you can always sell or trade in.

    Leasing and Financing our ways to "pay" for the use of a vehicle. How you purchase the vehicle does not change. So, shop around. Negotiate the selling price first and get the car for as low as you can go. My personal belief on the EXL is the bottom is around $30,500. (price plus dest.) So, I think you are very close - I would try to shave off another 200-400 hundred.

    As far as putting money down. My advice is to avoid it at all costs. In your case $600 is not that significant. But I profess never pay more than tags/regs/ and doc. The main reason being if you total the car - you are the only one that loses. Your insurance covers the amount due to the leasing Company so why put any of your money down, which no one will reimburse you for?

    Don't be fooled into seeing a lower monthly payment. In the end you pay the leasing company the same amount. Keep your cash.

    I did get your email, and I will send you the lease spreadsheet. Good luck.

    BTW I am looking at the EXL myself.
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    volvomaxvolvomax Member Posts: 5,238
    Here is my advice on leasing. My personal belief is leasing is best suited for the person who can write off the lease payments for business purposes. For the casual consumer if you are considering leasing for financial reasons of a lower payment, then I would steer you to find a less expensive car. Find a car you can afford, pay it off in 3-5 years and drive it for 6-7 years. It makes the best economic sense.

    Nice advice. Sadly, most people can't afford new cars without leasing.
    Paying off a $35,000 car in 3 yrs is beyond 99% of the car buying public.
    Even people with money don't do this. Wealthy people are far more likley to lease than buy their cars. Granted, they go for more expensive cars.

    Finally, remember. Unlike a purchase you are committed to making those payments over 39 months. You are stuck with this vehicle for 39 months, even if you lose your job, drop in income etc...unlike a car you can always sell or trade in.

    Actually, you CAN trade in or sell a leased car.
    There is a payoff amount just like a purchased car. If you trade in a purchased car early in the term, you will be upside down same as in a lease.

    Leasing and Financing our ways to "pay" for the use of a vehicle. How you purchase the vehicle does not change. So, shop around. Negotiate the selling price first and get the car for as low as you can go.

    Be careful. Some manufacturers have bigger cash incentives for leasing than purchasing. If you go in and negotiate a cash price, you may be leaving money on the table.

    As far as putting money down. My advice is to avoid it at all costs. In your case $600 is not that significant. But I profess never pay more than tags/regs/ and doc. The main reason being if you total the car - you are the only one that loses. Your insurance covers the amount due to the leasing Company so why put any of your money down, which no one will reimburse you for?

    Very good advice.
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    PoehlerPoehler Member Posts: 3
    Just wanted to say thank you all for the input. I think it's great to have a web site like this, very well done, kudos to all. Thank-You very much. -JMP
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    golicgolic Member Posts: 714
    Nice advice. Sadly, most people can't afford new cars without leasing.
    Paying off a $35,000 car in 3 yrs is beyond 99% of the car buying public.
    Even people with money don't do this. Wealthy people are far more likley to lease than buy their cars. Granted, they go for more expensive cars.


    You are right about this volvomax. And here is the system I use for our family car. I bought a car I could afford and pay off over 5 years and drove it for 7. However, in years 6 & 7 I still made those "car payments" into a savings account.

    Then I traded-in that old car for a few grand plus used the cash I was saving as a down payment and financed for 48 months. Same cycle. Drive it 2-3 years longer after the payoff and continue to pay myself. Eventually, I will get to the point of having the equity to get a car that meets a budget that I can pay off in 36 years. months.

    There are many affordable cars that can be financed for 60 months. It may not be the one to allow you to keep up with the joneses, but as someone once said, one should avoid investing/financing a depreciating asset.

    Will I drive Beemers or Lexus? No, but I am content with honda/toyota or a buick .
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    volvomaxvolvomax Member Posts: 5,238
    The point is, you are still making car payments after the car is paid off.
    Which is fine.
    Most people would rather have a nicer car if they are always going to be making a car payment.
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    jdl2jdl2 Member Posts: 2
    Hi Golic,

    Can you also send me the excel sheet?
    I'm about to lease an Infinity 2008 G35 and no money down , $399 for 36 months, 10,000 miles per year.
    I do not know how they are calculating this on a car that's $30,000.

    Thanks in advance,
    jdl1
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    golicgolic Member Posts: 714
    jdl1 - I can't send it to you if I don't have your email address. Email me or revise your profile to take your email off private.
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    kevindkoenigkevindkoenig Member Posts: 1
    Golic,

    I would appreciate your sending me the lease calc on excel. Thanks for your help.
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