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How to Calculate Monthly Lease Payments

173 messages,  Last post on Apr 11, 2013 at 2:36 PM

You are in the Prices Paid - Buying & Leasing Experiences Forum.

What is this discussion about? Car Leasing

Dissecting the Deal - How To Spot a Good Lease
 
10 Steps to Leasing a New Car
 
The "Residual Value" of Leasing
 
Calculate Your Own Lease Payment

Messages Page 3 of 19

#12 of 173 Are my calculations right? by blaholdings

Apr 05, 2010 (5:21 pm)

I was running my lease calculator on the deal Hyundai has on their new 2011 Sonata GLS. Are my calculations correct?
 
http://www.hyundaiusa.com/financial-tools/special-offers.aspx
 
Here are my numbers:
 
MSRP: 20,195
Down: 2,200
Payment: 199 (w/o tax)
Term: 36 mo
ALG Residual: 54% after 36 mo
Net Cap: 17,995 (MSRP - Down)
Residual: 10,905.30 (MSRP * ALG Res)
Financed: 7089.70 (Net Cap - Residual)
Dep. Fee: 196.94 (Financed / Term)
Fin. Fee: 2.06 (Payment - Dep. Fee)
Money Factor: 0.00007 ((Net Cap + Residual) / Fin. Fee)
Equiv. APR: 0.17% (Money Factor * 2400)

#13 of 173 Re: Are my calculations right? [blaholdings] by kyfdx HOST

Apr 05, 2010 (9:14 pm)

Replying to: blaholdings (Apr 05, 2010 5:21 pm)
1) Manufacturer lease promotions rarely use ALG residuals. To do a proper calculation, you have to know the actual residual percentage.
 
2) The disclaimer in the ad gives you the MSRP ($20915) and the capitilized cost ($19,165.11). Now, what they don't tell you, is if the Capitalized cost is the price of the car, to which you add the $595 acquisition fee, then subtract the down payment to get the Net CAP, or if the $19,165.11 is the actual Net Cap that the lease payment is based on.
 
3) To apply the money factor, you have to add the net cap and the residual, not subtract. The amount financed is actually an average of the net cap and residual, not the depreciation.
 
To actually figure a lease payment, you need four items:
 
MSRP
Net CAP cost
Residual percentage (or actual residual)
Money factor
 
Including the lease payment as the 5th variable, you can solve for any variable, as long as the other four are known quantities.
 
In Hyundai's example, only two numbers are known quantities (MSRP and lease payment), with possibly the CAP cost as 3rd known (but, even that is shaky). We don't know the residual or the money factor.
 
So, everything else is just a guess.

#14 of 173 But.. we don't have to guess.. by kyfdx HOST

Apr 05, 2010 (9:26 pm)

We can get the answer here: Hyundai Sonata Lease Questions
 
 
Looks like the residual is 60% and the MF is .00048
 
Using my handy-dandy spreadsheet, that means the actual NET CAP cost after accounting for acquisition fee and down payment is $19,165.11 (which, by the way... means they are only giving a discount from MSRP of $245!!)
 
So...
 
$183.78 depreciation
$ 15.22 finance charge
 
$199/mo. total..
 
Great residual/MF, but not much of a discount.... I would guess with some negotiation, you could get the same payment while only putting $1500 or less, down..

#15 of 173 Re: But.. we don't have to guess.. [kyfdx] by blaholdings

Apr 06, 2010 (8:00 am)

Replying to: kyfdx (Apr 05, 2010 9:26 pm)
Interesting - thanks

#16 of 173 money factor changes with credit? by cquenz

Apr 23, 2010 (9:14 pm)

I started negotiating the price of the ML 350 2WD in March. I have the price down around 45K but now the lease factor has changed.
  
Questions -
Does anyone know the current money factor? I
s it based on credit rating?
Does it change based on credit rating?
Initially they told me .002 in March, then it changed to .0025 in April. after checking out this forum, I told them I saw .0015 - they told me that was available if my credit was over 750.
  
Does money factor change based on the number of miles?
  
What about the residual value? What %?
Thanks so much!

#17 of 173 Numbers Not Adding Up by rose33

Apr 27, 2010 (10:00 am)

I would appreciate some help with my monthly lease payment. The numbers that the dealer has given me don't add up to the monthly payment. Here are the numbers:
 
Net Cap Cost - 35,693
Residual - 20319
Finance Fee - .00241
Sales Tax - 6%
36 Month Lease
 
The dealer is telling me that my monthly payment will be $561 (that includes tax - I double checked this) but I get a monthly payment of $595.77 when I calculate it. I thought for sure it was the tax, but I checked that with the dealer and he said tax is already included. Obviously, this mistake would be in my benefit, but I am leery of anything where the numbers don't add up right. And I don't want to put a deposit down and order the car only to have them say they made a mistake when I go to pick the car up. I would like to know what they could potentially be up to, if anything, before I raise this issue with him. Is this a huge red flag that I should be concerned with? Any advice would be greatly appreciated. Thanks!

#18 of 173 Re: Numbers Not Adding Up [rose33] by delta737h

Apr 27, 2010 (11:14 am)

Replying to: rose33 (Apr 27, 2010 10:00 am)
rose33,
 
PMT = 0.00241 x (35693 + 20319) + (35693 - 20319) / 36 = 595.77
 
Given the information that you provided, the only way your 595.77 payment includes tax would be if (a) you live in a state that collects all the tax upfront (like Ohio and New Jersey) and (b) the tax was capitalized in the lease (i.e., the net cap of 35693 includes the total sales tax). Otherwise, your payment, with tax, would be 595.77 x (1.06) = 631.52 if you live in a state that taxes the monthly payment and collects it monthly.
 
Assuming that all the information you provided is correct, it appears as though the dealer has understated the payment. In order to determine this definitively, I would need to see the dealer's LEASE WORKSHEET. If you like, I can critique it for you. Just ask the dealer to FAX it or email it to you and, then, email it to me at
 
diffeqzoominternet.net
 
John

#19 of 173 Re: Numbers Not Adding Up [delta737h] by rose33

Apr 27, 2010 (12:00 pm)

Replying to: delta737h (Apr 27, 2010 11:14 am)
John,
 
Thanks so much for your help. I really appreciate it. I don't have the dealer's lease worksheet but I can get it.
 
Regarding the payment, I calculated that the $595.77 payment already included the 6% sales tax - so I must be missing something. Here is how I determined the payment:
 
Depreciation Fee (35,693 - 20319) / 36 = 427.06
Finance Fee (35,693 + 20319) x .00241 = 134.99
Sales Tax (427.06 + 134.99) x .06 = 33.72
 
This adds up to $595.77 and includes the tax. The problem is that he's telling me my payment will be $561 including the tax. I just don't understand how he's arriving at that number given the cap cost, residual and money factor. I currently lease a car in my state and I pay my sales tax each month in my payment so that's why I added it into my calculation above.

#20 of 173 Re: Numbers Not Adding Up [rose33] by delta737h

Apr 27, 2010 (12:44 pm)

Replying to: rose33 (Apr 27, 2010 12:00 pm)
rose,
 
Sorry, you're quite right. My calc should be...
 
PMT = 0.00241 x (35693 + 20319) + (35693 - 20319) / 36 = 562.04
 
IF the net cap (35693) DOES INCLUDE SALES TAX, then the payment, including tax, is 562.04 and so the dealer would be correct.
 
Unless you're absolutely certain, I need to know your state in order to determine how the tax is computed. Not all states tax the payment. If your state does tax the monthly payment and collects it monthly, then you are 100% correct when you calculated the monthly payment with tax to be...
 
562.04 x 1.06 = 595.76
 
The dealer's LEASE WORKSHEET will speak volumes and will tell me everything I need to know.
 
John

#21 of 173 Help in calculating rate by kl07rph

May 10, 2010 (2:38 pm)

Hello, hopefully one of the moderators can assist me.
 
I was previously shopping around for a 2010 X5, with a 36month, 15k mile/yr lease.
Ended up purchasing instead.
 
Just for my curiousity and guidance in the future, could one of the mods calculate a lease for me?
MSRP 59175
Initial Negotiated Price (Cap cost?): 56914
Illinois State Sales Tax: 4568.18
Registration: 194
Docs: 154
Electronic Filing: 25
OTD Price incl. fees 61855.56
Residual 60%
MF 0.0023
 
With my offered $5000 Cash Due, dealer was coming up with $891/month (inc tax), which for the life of me can not come up w/ those numbers! My calculations have been yielding a number in the high 700s/low 800s (i.e., leaseguide.com calc gave me 804, w/ tax).
 
 I hope one of the mods can assist me. Thanks in advance!
 
BTW, my wife and I purchased much lower than this dealer's quotes.

Messages Page 3 of 19

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