How do finance companies calculate (predict) what the residual value to put in a lease?

LiverX44LiverX44 Member Posts: 1
edited December 2020 in Chevrolet
How do finance companies calculate (predict) what the residual value to put in a lease?
ex: After 2 year lease RV is $20,000. Regardless of what the agreed upon price was, what calculations do the companies use to decide on $20,000?

Best Answer

  • kyfdxkyfdx Moderator Posts: 260,432
    Answer ✓
    LiverX44 said:

    How do finance companies calculate (predict) what the residual value to put in a lease?
    ex: After 2 year lease RV is $20,000. Regardless of what the agreed upon price was, what calculations do the companies use to decide on $20,000?

    The residual value is a percentage of the full MSRP. That percentage is determined by the leasing bank.

    How do they decide? History and experience.

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Answers

  • MichaellMichaell Moderator Posts: 258,347
    LiverX44 said:

    How do finance companies calculate (predict) what the residual value to put in a lease?
    ex: After 2 year lease RV is $20,000. Regardless of what the agreed upon price was, what calculations do the companies use to decide on $20,000?

    The residual and money factors are set by the bank to achieve a certain payment.

    What difference does it make to you - you can't change the residual.

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