Calculate Your Own Lease Payment!

Calculate Your Own Lease Payment!

You’re probably excited about your new car investment but not sure how to go about the lease payment process. It can sometimes seem complicated, especially if you have no experience in this domain. To get a better understanding of what your monthly car lease payments will look like, make sure to take notes from the article.

If you come to understand the basic elements or the factors involved in your monthly lease payments, you can calculate the payments accurately. When doing so, make sure to take into consideration the following:

  • Look for any kind of hidden fees

  • The total lease cost should be calculated

  • Monthly Payment

Also, before you go ahead with any final decision, make sure to understand the following terminologies:


MSRP is also known as the Manufacturer’s Suggested Retail Price. This is also recognized as the vehicle’s sticker price and does not usually include any kind of additional charges.

Base Cap Cost

This refers to the negotiated lease vehicle cost. This would refer to the negotiated or final cost agreed by the dealer and you. This could include any further discounts or the reductions from the sticker price.

Additional Costs

The lease agreement will come with several additional costs. These would include an extended warranty cost, bank fees, insurance, luxury tax and several others. Make sure to find out all costs included in the agreement before signing it. The last you want is to be surprised by a surplus amount.

Cap Cost Reductions

The lease cost can be reduced sometimes by payments an individual will put down in the initial stages. This refers to the credit, trade-in or even a down payment. Additionally, the manufacturer could also include the rebate cost.

Adjusted Net Capital Cost

If you bring together the MSRP, Based Cap Cost, all additional costs with the Cap Cost Reduction and add them together, you’ll receive the Adjusted Net Capital Cost.

Residual Value

This value would help an individual understand the lease-end percentage of the vehicle. It works as the estimate of the vehicle’s wholesale value when calculated toward the end of the lease term. You will be able to receive a lower monthly lease only if the interest rate is high. This value is usually set by the lease service and if you’d like to check with the value, make sure to ask the dealer for the same.

Money Factor

This factor is understood as the lease finance cost in the lease. Even though the rate isn’t really disclosed through the agreement, the agreement would showcase it through the rent or lease charge. To calculate this factor, make sure to divide the number of months of the lease with the rent charge. Using the resulting number, have it divided by the residual and the total of the cap cost to receive the money factor.

Make sure to seek help from a reliable professional if this seems too overwhelming for you. In all, make sure to read through your contract thoroughly before signing the deal.