Instructions
Step 1:
Find out the manufacturers suggested retail price of the vehicle in which you are interested by visiting the manufacturer’s website or other car value sites. Subtract your down payment or trade-in amount from the sticker price. This amount is your net cost.
Step 2:
Contact the dealer to find out the interest rate, called the Money Factor, as well as the Residual Percentage rate. Multiply the residual percentage by the MSRP to get your residual amount.
Step 3:
Subtract the residual amount from the net cost. Divide the difference by the number of months in the lease. For example, if the residual percentage multiplied by the MSRP is 15,000 and the MSRP is $20,000, the difference would be 5,000. Therefore you would divide 5,000 by the length in months of the lease. This amount is the monthly depreciation fee.
Step 4:
Determine the finance fee by adding the sticker price and the residual amount. Multiply the total by the interest rate. This will be the monthly finance fee.
Step 5:
Add the monthly depreciation fee and the monthly finance fee to calculate your monthly lease costs.
Resources
* Kelley Blue Book Car Values
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