lease gurus...need some help
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From: L.A.
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lease gurus...need some help
Looking into a new lease and was given the residual and money factor by my dealer. I plugged these into the standard lease formula (Monthly payment = Depreciation Fee + Finance Fee), but the figures did not match.
My question is whether this formula is applicable to all auto leases? Is my dealer giving me the schtick by adding some hidden costs I don't know about?
Thx in advance guys,
Tom
My question is whether this formula is applicable to all auto leases? Is my dealer giving me the schtick by adding some hidden costs I don't know about?
Thx in advance guys,
Tom
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Joined: Nov 2001
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From: THE Orange County, California
2024 C8 Z06- 2025 BMW CS- 2022 Porsche 992 GTS
Here is how I pencil out a lease, hope it helps.
1. Net Cap Cost (cost after any down) minus the residual then divide by your term and you will get your base depreciation.
2. Then take that same Net Cap Cost and add the residual to this number and then take this number and multiply it by the lease money factor (generally a number based on your credit varying from .00140 up to .00400 depending on the bank and your dealer participation). The number you get from this calculation is the rent charge (interest equivalent).
Take the numbers from 1 and 2 and add them together to get your payment- then add on sales tax on each payment if you did not pay all the tax up front (varies from state to state).
1. Net Cap Cost (cost after any down) minus the residual then divide by your term and you will get your base depreciation.
2. Then take that same Net Cap Cost and add the residual to this number and then take this number and multiply it by the lease money factor (generally a number based on your credit varying from .00140 up to .00400 depending on the bank and your dealer participation). The number you get from this calculation is the rent charge (interest equivalent).
Take the numbers from 1 and 2 and add them together to get your payment- then add on sales tax on each payment if you did not pay all the tax up front (varies from state to state).
