Does a higher residual value mean a greater monthly payment?
Newbie
Joined: May 2005
Posts: 3
Likes: 0
If a car retains its value well (i.e. has a decent residual value at lease end) your payments should be smaller holding all things equal. A lease is supposed to pay for the depreciation of the vehicle while you lease it. Of course there are other factors that are calculated into your monthly payment - one major one being the "money factor". That variable is similar to an interest rate if you were purchasing the car and probably varies based upon manufacturer/dealer parameters and your personal credit score.
There are many websites that get into great detail of the monthly lease payment calculation if you do a web search.
There are many websites that get into great detail of the monthly lease payment calculation if you do a web search.
Former Vendor of MBWorld
Joined: Jan 2005
Posts: 583
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From: Cincinnati, OH
No stupid questions here.
With a higher resale (residual) your payments will be lower. The other important factor to consider is the money factor (interest rate). A high money factor could negate a higher residual value.
The overall best lease program is a low money factor and a realistic residual value.
With a higher resale (residual) your payments will be lower. The other important factor to consider is the money factor (interest rate). A high money factor could negate a higher residual value.
Originally Posted by jm10388
This may seem stupid, but does a higher resale value mean that your lease monthly payments will be greater or smaller?
