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How to Calculate Your Own Car Lease Payment
How to Calculate Your Own Car Lease Payment

How to Calculate Your Own Car Lease Payment

September 10, 2021

Not everyone can own a car. But in our ever-developing world, the mere fact that you do not own a car does not stop you from driving one; you could lease a car. As leasing is not free, it is of course understandable that you would want to know how much you would need to expend to acquire a car on lease. But doing your own Auto Lease Payment calculation can be challenging for quite a number of reasons. It may be that you are baffled by all the legalese in the leasing agreement or, that the different figures on it have your head spinning. This article on How to do your own auto lease payment calculation should help alleviate any apprehension you may have.
What you need to do your own Car Lease payment Calculation
To get you started on your way to calculating your own auto lease payment calculation, there is certain information you will require and we have taken the liberty to enumerate them below.

  1. Manufacturer’s Suggested Retail Price (MSRP)

This represents the car’s retail price

  1. Selling Price

This represents the price for which the car is being sold after subtracting all rebates and incentives. It can be lower than the MSRP if you negotiate well with the dealer.

  1. Incentives and Rebates

These are fees that you can apply against the cost of the car, ensuring that you pay less

  1. Residual Value

It is usually calculated in percentage and it represents the dealer or manufacturer’s estimation of the value of the car after some time, usually a couple of months.

  1. Term of lease

This refers to the period that the lease covers. Even though a term of 36 months is usual, the lease term is subject to agreement.

  1. The Money Factor

This represents the amount to be paid as interest on the car that is subject to the lease.
How to do your own car lease payment calculation

  • Calculate the Depreciation

Calculating the monthly Depreciation is the first step that you take in calculating your own auto lease payment calculation. As with every other thing, the law of diminishing returns applies to cars and that is the reason that dealers and manufacturers calculate the depreciation to enable them to recoup some money for the diminishing value of the car that is the subject of a auto lease. To calculate the Depreciation, you have to subtract the Capitalized Cost of the car from its Capitalized Cost and then divide the result by the term of the lease. The Capitalized cost can be assessed by subtracting all rebates, down payments, and incentives from the selling price.

  • Calculate the Finance Charge

The Monthly Finance charge is can be assessed by adding the Capitalized cost to the Residual Value and multiply the result you get with the Money Factor.

  • The Actual Lease Payment

The amount that you get when you make an addition of the Depreciation and the Finance Charge represents your lease payment.
Things to remember about calculating your own Car Lease Payments
Like you feared earlier, there is a lot of legalese that can make calculating your own auto lease payment strenuous. This segment explains them.

  • Sales Tax

This represents a charge that some states require that you pay on the leased parts of the car.

  • Bank Fee

This represents the administrative or processing fee that is charged by the manufacturer. It is also known as the acquisition fee.

  • Government Charges

This represents fees charged by the Government for things like the registration of the car.
Now that you know how to do your own auto lease payment calculation, you should know that the result you get from your calculations may vary from the quotations you receive.  This advice is based on helping you calculate a relative auto lease payment.
Signature Auto Group New York & Florida’s Premiere New Car Leasing Company
With Signature Auto locations in Brooklyn, NY and Fort Lauderdale, FL we are dedicated to providing our New York Auto Leasing and Florida Car Leasing customers the best deals on the latest Auto Leases. As a company we learned a long time ago just how significant it is to have talented, loyal and motivated staff to serve our clients in every aspect; before, during and of course even after such an important vehicle purchase. Even though this will always be an ongoing process, this organization has been fortunate to have attracted and retain such extraordinary individuals at every single level in this company.
We are honored to serve all Signature Auto Group clients past, present and future clients in the major areas of the United States and around the rest of the world. Signature wants their customers to enjoy life to its fullest. We also have high standards that the staff agrees with and are committed to providing you with the service you deserve. The sales staff is extremely knowledgeable about our products and is there to get you the fantastic vehicle that you want and desire. Come on in and check out our extensive inventory that includes all the latest makes and models of vehicles. It doesn’t matter whether you are wanting to purchase or lease; we have the perfect plan for you. And don’t forget to check out our specials, we are always having great lease specials on a lot of the new vehicles in stock.


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