Figuring the Lease Payment
CEDRIC RASHAD, an Atlanta leasing consultant, says many people shy away from leasing because "they think it's some
sort of voodoo." But don't be put off. This worksheet, which Rashad helped us develop to demystify the lease, will
help steer you to good deals.
CAPITALIZED COST top
This is the cost of the car written into the lease, including title and registration fees and other costs rolled into the lease.
CAPITALIZED-COST REDUCTIONS top
Any down payment, the value of your trade-in and rebates that reduce the price of the car.
RESIDUAL top
The estimated value of the car at the end of the lease. Ask the dealer for this figure or use the resale values in our Car Finder for an
estimate. We show retained value after two and four years. If you want a three-year lease, split the difference.
MONEY FACTOR top
This represents the cost of financing the car. It is the equivalent of an interest rate divided by 24. So a money
factor of 0.00375 is the equivalent of a 9% rate on an auto loan. Ask the dealer for the money factor.
SALES TAX top
Some states charge this in full at the start of the lease; others add it to each payment.
Ask how it works where you live.
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