How to calculate your lease payment
Understanding how to calculate your monthly lease payment makes it easier
for you to make an informed decision. Yet، most of us shy away from the
complicated math on our lease contract، leaving it up to the dealer to
do the payment formula.
Actually، it’s not that difficult! Once you understand all the figures
involved in calculating your monthly payments، everything else falls into
place. These key figures are:
MSRP (short for Manufacturer’s Suggested Retail Price): This is the list
price of the vehicle or the window sticker price.
Money Factor: This determines the interest rate on your lease. Insist on
your dealer to disclose this rate before entering into a lease.
Lease Term: The number of months the dealer rents the vehicle.
Residual Value: The value of the vehicle at the end of the lease. Again،
you can get this figure from the dealer.
Now، let us calculate a sample lease payment based on a vehicle with an
MSRP (sticker price) value of $25،000 and a money factor of 0.0034 (this is
usually quoted as 3.4%). The scheduled-lease is over 3 years and the
estimated residual percentage is 55%.
The first step is to calculate the residual value of the car. You multiply
the MSRP by the residual percentage:
$20،000 X .55
