How Do You Calculate An Auto Lease?
Finding a car at the right price is just part of the equation for comfortable monthly car payments. A car lease has several variables when calculating the total cost of the car and your final monthly payment. Knowing what you can afford will help narrow the decision while car shopping. Calculating an exact payment down to the penny is nearly impossible, but you can closely estimate monthly payments for a given car price. Calculate the money factor. The money factor is based on the interest rate. The interest rate is determined by the bank that extends the loan. To calculate the money factor, divide the interest rate by 2,400. For instance, a 9 percent interest rate is a money factor of: 9/2400 = .00375. Decide on your lease term. A common rule is to only lease a car for as long as the warranty. Most warranties and lease options are from three to five years. Find the residual value. The residual value is determined by the bank. The best way to find the residual value is calling the bank
