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.
- Manufacturer’s Suggested Retail Price (MSRP)
This represents the car’s retail price
- 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.
- Incentives and Rebates
These are fees that you can apply against the cost of the car, ensuring that you pay less
- 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.
- 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.
- 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 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.
This represents a charge that some states require that you pay on the leased parts of the car.
This represents the administrative or processing fee that is charged by the manufacturer. It is also known as the acquisition fee.
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.
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Car Leasing Florida
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Signature Auto Group is the best destination for car leasing in the Fort Lauderdale and Miami area. We offer an extensive inventory made up of all makes and models, along with an experienced staff dedicated to making your next visit pleasant and straightforward.
We aim to provide as many avenues of communication as possible, allowing you to interact with our team in a manner that is most comfortable to you. Regardless of the question, feel free to email us directly at email@example.com or use the built-in contact form. If you prefer a call instead, you can reach our team at (561) 709-2277.
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A lease transfer works by allowing one driver to transfer their lease to another, who must qualify for credit approval with the finance company. A lease transfer is a simple process in which the name on a lease account is changed for the duration of the term. Other than the registered driver and the name on the lease, the remainder of the lease contract is unchanged. This includes mileage restrictions, wear-and-tear restrictions and the total length of the lease in months.
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