How Do You Calculate A Lease Residual Value?
Before you sign a lease agreement, check out the residual value of the car. The residual value is what the leasing company believes the car will be worth at the end of your lease. It has a huge impact on your monthly payments and could also be important if you decide to purchase the car at the end of the lease. The value is based on a percentage of the Manufacturer’s Suggested Retail Price (MSRP) and is set by the leasing company, not the dealer. Find the MSRP for the car. Note that you calculate residual value using MSRP, even if you negotiated the price down below MSRP with the dealer. The dealer can tell you the MSRP or you can find the information online using Edmunds, Kelly Blue Book or the manufacturer’s website. Request the residual value percentage rate the leasing company is using to determine the lease end value. Typically, this percentage will be between 50 and 58 percent but can go lower or higher. The lower the percentage, the lower your monthly lease payments will be and
