1. What is Auto Lease Payment Calculation?

The auto lease payment calculation determines your monthly payment when leasing a vehicle, accounting for capitalized cost (including any negative equity), residual value, lease term, and money factor (interest rate).

2. How Does the Calculator Work?

The calculator uses the standard lease payment formula:

Where:

• \( \text{Cap Cost} \) — Total financed amount including vehicle price, fees, and negative equity (USD)
• \( \text{Residual} \) — Estimated value of vehicle at lease end (USD)
• \( \text{Term} \) — Lease duration in months
• \( \text{Money Factor} \) — Lease interest rate (divide APR by 2400 to convert)

Explanation: The formula has two components - depreciation (spread over the lease term) and finance charge (interest on the leased amount).

3. Importance of Accurate Lease Calculation

Details: Understanding your lease payment breakdown helps negotiate better terms, compare deals, and budget accurately. Negative equity significantly impacts payments.

4. Using the Calculator

Tips: Enter all values in USD. Money factor is typically provided by the dealer (e.g., 0.00125 equals ~3% APR). Include any negative equity from previous vehicle in capitalized cost.

5. Frequently Asked Questions (FAQ)

Q1: What is negative equity in a lease?
A: When you owe more on your current vehicle than it's worth, this amount gets added to your new lease's capitalized cost.

Q2: How does money factor relate to APR?
A: Money factor × 2400 = APR. For example, 0.00125 MF = 3% APR.

Q3: What's a good residual value percentage?
A: Typically 50-60% of MSRP for 36-month lease, but varies by make/model/term.

Q4: Can I negotiate the money factor?
A: Usually set by lender, but dealers may mark it up. Compare with bank/credit union rates.

Q5: How does negative equity affect my lease?
A: Increases monthly payments since you're financing the extra amount over the lease term.