How accurate is this Lease Calculator?
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From: La La Land
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From: Sacramento
I think its probably accurate if you can figure out what are the correct amounts to enter.
The actual formula is quite complicated. The numbers you need are the MSRP, Residual value and the money factor.
The MSRP is easy, its the sticker price plus any accessories, etc. The residual value changes depending on the car and the term of the lease; the longer the term the lower the residual. The money factor is the interest, rate kind of. To get the money factor, divide the interest by 2400. Thus an APR of 7.9% is a money factor of 0.00329. You can get the residual and the money factor or interest from the leasing company.
The last item you need to calculate it is the Capitalized cost. This is the difficult one. The capitalized cost is the amount you are actually paying for the vehicle. This sometimes includes the lease acquisition fee.
The formula to calculate the monthly payment is as follows:
Monthly payment = principle + interest + sales tax
residual = MSRP x % residual
principle = (cap cost - (residual)) divided by the lease term
interest = (cap cost + residual) x money factor
For example, an Accord, 36 month lease, MSRP of $24000 and I negotiated a sales price of $22500, residual of 60% and APR 7.9%
residual = 24000 x .60 = 14400
principle = (22500 - 14400) divided by 36 = $225
interest = (22500 + 14400) x .00329 = $121.40
So, the monthly payment is 225+121.4 = $346.40 + sales tax.
Now, the drive off usually includes the first month payment, security deposit, and registration. The lease acquisition fee can be paid in the Drive off or added into the lease via the capitalized cost.
The above example is with no money down only drive off costs. If one wanted to put money down then it would be applied to reduce the capitalized cost.
Hope this helps.
The actual formula is quite complicated. The numbers you need are the MSRP, Residual value and the money factor.
The MSRP is easy, its the sticker price plus any accessories, etc. The residual value changes depending on the car and the term of the lease; the longer the term the lower the residual. The money factor is the interest, rate kind of. To get the money factor, divide the interest by 2400. Thus an APR of 7.9% is a money factor of 0.00329. You can get the residual and the money factor or interest from the leasing company.
The last item you need to calculate it is the Capitalized cost. This is the difficult one. The capitalized cost is the amount you are actually paying for the vehicle. This sometimes includes the lease acquisition fee.
The formula to calculate the monthly payment is as follows:
Monthly payment = principle + interest + sales tax
residual = MSRP x % residual
principle = (cap cost - (residual)) divided by the lease term
interest = (cap cost + residual) x money factor
For example, an Accord, 36 month lease, MSRP of $24000 and I negotiated a sales price of $22500, residual of 60% and APR 7.9%
residual = 24000 x .60 = 14400
principle = (22500 - 14400) divided by 36 = $225
interest = (22500 + 14400) x .00329 = $121.40
So, the monthly payment is 225+121.4 = $346.40 + sales tax.
Now, the drive off usually includes the first month payment, security deposit, and registration. The lease acquisition fee can be paid in the Drive off or added into the lease via the capitalized cost.
The above example is with no money down only drive off costs. If one wanted to put money down then it would be applied to reduce the capitalized cost.
Hope this helps.
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From: La La Land
V8eater,
Hey man, thanks for the breakdown in figures. My local Honda dealer is trying to sneak some figures in. They're selling me at MSRP $32800, 67% res, 36 month, 3.5% money factor. All the numbers, through their calculation, came out to $588!!! what the heck. Thanks again for breaking the numbers down.
Appreciated.
Wantone
Hey man, thanks for the breakdown in figures. My local Honda dealer is trying to sneak some figures in. They're selling me at MSRP $32800, 67% res, 36 month, 3.5% money factor. All the numbers, through their calculation, came out to $588!!! what the heck. Thanks again for breaking the numbers down.
Appreciated.
Wantone
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From: West Henrietta UPSTATE NY
I have never leased a car so I have no experience; in fact I have never bought a new car, until now.
I have a deposit down on an '02 S2. The car is in the dealer's February allotment so I can get it in April when most of the snow is gone. I have yet to work out the final transaction but we have a contract and I'm not concerned about something weird happening. I'm planing to put 20K down in cash and then take out a car loan for the balance.
Is there any advantage to leasing a car when you know right up front that you will be keeping it?
I have a deposit down on an '02 S2. The car is in the dealer's February allotment so I can get it in April when most of the snow is gone. I have yet to work out the final transaction but we have a contract and I'm not concerned about something weird happening. I'm planing to put 20K down in cash and then take out a car loan for the balance.
Is there any advantage to leasing a car when you know right up front that you will be keeping it?
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From: La La Land
Raj,
Can you explain why so many of the lease calculators are coming up with $380/month with the same variables I've given you? Out of curiosity, shouldn't the money factor be assested only to the residual figure? Why must the cap cost be added to residual x m.f.? Am I making sense???
Want1
Can you explain why so many of the lease calculators are coming up with $380/month with the same variables I've given you? Out of curiosity, shouldn't the money factor be assested only to the residual figure? Why must the cap cost be added to residual x m.f.? Am I making sense???
Want1
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From: Laguna Niguel, CA
If you have a Palm device get this shareware called "Lease it" !
I have it and used it while sitting in the salesman's office!
There's nothing like catching a salesman in a lie or when they
are "playing" with the numbers to screw you!
Not that I'm bitter or anything!
I just hate being screwed by a car dealer!
I can't tell you how satisfying it is to know exactly where YOUR dollars are going!
Here's the web site
\"Lease It\" by DPW Designs
Good luck!
I have it and used it while sitting in the salesman's office!
There's nothing like catching a salesman in a lie or when they
are "playing" with the numbers to screw you!
Not that I'm bitter or anything!
I just hate being screwed by a car dealer! I can't tell you how satisfying it is to know exactly where YOUR dollars are going!
Here's the web site
\"Lease It\" by DPW Designs
Good luck!
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Joined: Aug 2001
Posts: 56
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From: Sacramento
Wantone,
If you are going to keep the car, BUY IT, DON'T LEASE. In the end it will be cheaper to buy.
According to the numbers you gave me, I arrive at:
priniciple = (32800-21976)/36 = 300.67
interest = (32800+21976) x .0035 = 191.72
monthly payment = 300.67+191.72 = 492.39 + tax.
Does the $588 include tax. If yes, then let's assume it is around 7.5% then the amount should be:
$546 + tax.
Your dealer is trying to screw you by adding in additional capitalized cost to arrive at $588. You need to ask if they are putting any of the drive off costs into the lease. Sometimes they will tell you they are selling the car at MSRP but are actually adding in all kinds of figures such as an Acquisition fee or others. Just ask them specifically what the Capitalized Cost of the vehicle is and how they arrived at this figure.
As for the interest calculation, that's where they make their money. The monthly payments are less than buying and most people don't realize they are paying a hell of a lot of interest.
The lease calculators are correct but the figure for the interest you are giving is wrong. The 3.5% is not the correct number. The dealer is actually using 0.0035 as the money factor which is actually an APR of 8.4%. If you put 8.4% in the calculator, you will get my numbers above. With 3.5 (which is the money factor) it looks like this:
principle = (32800-21976)/36 = 300.67
interest = (32800 +21976) x (3.5/2400) = 79.88
payment = 300.67+79.88 = $380.55 + tax.
Good Luck. Pin them down on the Capitalized Cost!!!!!
Raj
If you are going to keep the car, BUY IT, DON'T LEASE. In the end it will be cheaper to buy.
According to the numbers you gave me, I arrive at:
priniciple = (32800-21976)/36 = 300.67
interest = (32800+21976) x .0035 = 191.72
monthly payment = 300.67+191.72 = 492.39 + tax.
Does the $588 include tax. If yes, then let's assume it is around 7.5% then the amount should be:
$546 + tax.
Your dealer is trying to screw you by adding in additional capitalized cost to arrive at $588. You need to ask if they are putting any of the drive off costs into the lease. Sometimes they will tell you they are selling the car at MSRP but are actually adding in all kinds of figures such as an Acquisition fee or others. Just ask them specifically what the Capitalized Cost of the vehicle is and how they arrived at this figure.
As for the interest calculation, that's where they make their money. The monthly payments are less than buying and most people don't realize they are paying a hell of a lot of interest.
The lease calculators are correct but the figure for the interest you are giving is wrong. The 3.5% is not the correct number. The dealer is actually using 0.0035 as the money factor which is actually an APR of 8.4%. If you put 8.4% in the calculator, you will get my numbers above. With 3.5 (which is the money factor) it looks like this:
principle = (32800-21976)/36 = 300.67
interest = (32800 +21976) x (3.5/2400) = 79.88
payment = 300.67+79.88 = $380.55 + tax.
Good Luck. Pin them down on the Capitalized Cost!!!!!
Raj