How to: Figure your lease payments

[BlackjackMulligan]

Here's what you're going to need from the dealer:

MSRP of vehicle (sticker price)

Selling price (what you're offering)

Additional costs (such as the acquisition or bank fee if you want to roll it in, add it here. If you want a lower payment, pay it out of pocket and leave this blank)

Any $$ down NOT including fees, first months payment, TTL, etc?

Money Factor (ie: .00285) this is the lease's "interest rate" and the current ones are available on this board under "November Lease Rates". This is a number the dealer likes to jack up to make more money on a deal.

Residual percentage (ie: 24 months 70% for 15K miles per year, 36 mos 61% for 15K miles per year, etc) This is also available under "November Lease Rates" and is non negotiable for either side.

Term of lease (24, 36, 48 months)

State tax your state charges

You then plug it into the following tool, just follow the steps:

www.leaseguide.com/calc.htm

It's easy! This way, the dealer can't quote you a great selling price but jack up the money factor, or vice versa. An informed customer is going to get the best deal.

Definitions:

Residual Value: What the car is worth at the end of the lease term. This gets lower the more miles you require per year, and the more months you lease for. When leasing, you pay the depreciation from the purchase price to the residual value at the end of the lease like this:

MSRP-------------------------------Residual Value
$45,000-------------------------------- $33,000

You pay the difference plus finance charges (money factor) so in this case, you would pay $12K over 24 months plus the money factor (these numbers are hypothetical). BUT, if you talk them down from MSRP, you pay as follows:

MSRP--Negotiated Price--------------- Residual Value
Same $43,000---------------------- $33,000

So in this case, you talked them down $2K that you don't have to pay in depreciation cost, so you end up only paying $10K over 24 months plus money factor. This is why you don't negotiate with payment, you negotiate the price of the car.

IF you want to put money down on a lease, what you're doing is paying down the residual cost up front, and nothing else. Doing this lowers your payment. Many people advise against this. I prefer a lower payment, so I put money down IF I've already decided the money is going toward the lease. Otherwise, don't put money down.

I hope this helps. Leasing can be confusing. If you have questions, ASK! BUT- no one can run a number for you without all the info above. So please don't post "whats my lease going to be for 3 years on MSRP 45K?" .....way too much info missing.

[Cooldaddygroove]

Or, you can use this handy lease calculator http://www.canadiandriver.com/tools/lease.htm