Car Lease Calculator: Get the Best Deal on Your New Wheels – NerdWallet

Use this car lease calculator to estimate your monthly payment to :

Below is a guide to using the rent calculator and the best way to interpret the results.

Car Lease Calculator

The key figures that calculate your auto lease payment

The calculation that produces a monthly rent payment contains many figures. Some you can negotiate, others are set by the lender, and others are astir to you. however, these four figures have the biggest impact on your monthly requital :

  • The negociate sale monetary value of the cable car
  • The resale rate of the car, which is its predict respect at the end of the lease
  • The interest rate
  • The distance of the lease

Sale price of the cable car : even though you ‘re not actually buying the car, you can negotiate the sale price to lower your monthly payment. For an calculate, look up the current marketplace value of the car on one of the price guides, such as Edmunds.com ’ s True Market Value. resale value : This is besides called the “ residual value. ” It ‘s what the car is worth at the end of the lease and it ‘s set by the lender, so you can ’ t negociate it. however, it ’ randomness bright to lease a car with beneficial resale value. hera ’ south why : If a cable car is worth $ 30,000 new, and its residual respect after three years is $ 15,000 ( or 50 % ) you have basically used $ 15,000 of value. But if that same car is worth $ 18,000 ( 60 % ) after three years, you have used only $ 12,000 of its measure. With a higher resale rate, you ‘re on the hook for less since you pay only for the value you use. finally, you ‘ll get the specific remainder value from the dealer. But for now, use a resale value between 50 % and 58 % for most cars. interest rate : In a lease calculation, the interest rate is called the “ lease agent ” or “ money factor. ” In a monthly rent calculation, the sake rate is converted to a decimal fraction therefore interest on the monthly payment can be computed. so 3 % matter to would be written as 0.00125. ( You can convert an interest rate to a decimal by dividing it by 2,400 : 3/2,400 = 0.00125. conversely, you can convert a rent factor to an interest rate by multiplying it by 2,400. ) The rate you get is based on your credit rating score. different lenders ( leasing companies ) will offer different interest rates. Use a rate between 2 % and 5 % if you have hard credit, between 6 % and 9 % for median credit and between 10 % to 15 % for poor credit. length of the lease : car leases normally concluding 36 months, which is how long most extensive warranties final. This means you don ’ t have to pay extra for extended coverage, and your cost of sustenance will be low since the car is new. however, you can find leases for only 24 months and even 38 or 40 months. Don ’ metric ton be talked into leasing for four or five years. You could be on the hook shot for more service costs, buying newfangled tires and costly repairs.

Other factors that affect what you’ll pay each month

There are other factors that alter the monthly requital, some of which you choose and others that the rent caller sets. Drive-off fees : This is alike to a down requital when you buy a cable car. It ‘s made up of several fees and what is sometimes called a “ capitalized monetary value reduction. ” You can select any drive-off total you want, all the way down to zero. We recommend that you start a lease with a drive-off requital of about $ 1,000. Making a higher payment upfront will reduce your monthly payment but it will besides reduce your cash flow for other things, such as investments. besides, unlike when you buy a car, you ‘re not building equity in the fomite.

Cash rebates and incentives : When a car international relations and security network ’ t selling cursorily enough, the manufacturer may offer rebates and incentives, which can reduce the monthly payment of a lease. Often, these are just called “ lease specials ” and can greatly reduce your payment. Websites such as Edmunds.com track lease offers for car shoppers. Included miles : Most lease contracts allow 12,000 miles a year. however, some leases nowadays allow alone 10,000 miles, or fewer, which provides less value and should result in a lower monthly payment. Always check to see how many miles are included with the lease. Sales tax : One of the attractions of rent is that you pay sales tax only on the measure of the car ’ sulfur value that you use, not the total purchase price. So if sales tax is 9 % and the car costs $ 30,000, the buyer pays $ 2,700. Leasing the same car for 36 months, with a $ 15,000 residual respect, the sales tax is $ 1,350 and is paid in smaller amounts ( $ 37.50 ) each month.

How to use our auto lease calculator

now that you have all the information you need, you can estimate your monthly requital. ballyhoo in the figures that best lawsuit your fiscal situation and life style. Input different drive-off amounts and see how it changes the monthly payment. But remember not to put excessively a lot money down, because that defeats one of the advantages of lease, which is to preserve cash flow. One scenario here ’ s how to estimate the monthly payment on a midsized economy sedan with a gummed label price of $ 33,000 .

  1. By checking pricing guides on Edmunds.com, Kelley Blue Book or TrueCar, you find you could buy the car for $ 30,000, so put that in the box marked “ Price of Car. ”
  2. Decide how much you want to budget for a down payment, or drive-off fees. We recommend no more than about $ 1,000. enter that in the “ Down Payment ” field .
  3. You think the resale value of this cable car is median, so you multiply the $ 30,000 by 0.55 and put the result, $ 16,500, in the box marked “ Car ’ s Resale Value at End of Lease. ”
  4. Enter your local sales tax. If you ‘re leasing in another state, insert its sales tax. For this model we ’ ll use 9 % .
  5. put option in the pastime rate you think you ’ ll qualify for based on your credit history. If you don ’ t know your credit seduce, this is a dear time to check it. Enter the interest rate as a whole number, not a decimal. here, we ‘ll use 3 % .
  6. In the “ Number of Months ” box, enter how long you want the lease to last. Remember, 36 months is the dessert spot for leasing. That ’ s what we ’ ll use. Shorter leases — 24 months — are all right, but the payments will be higher .

And the result is … On the right hand side of the calculator, you ’ ll see that the monthly lease payment is $ 440.47. That includes the sales tax of $ 36.37 and $ 56.88 in interest.

How to use the car lease calculator’s results

Using a lease calculator gives you a benchmark monthly payment to use as you shop for your best manage. If you follow our promptly usher to rent, you ‘ll request lease quotes from local dealers. With an estimated monthly payment from the lease calculator, you ‘ll know a good deal when you see one. Remember, when you compare quotes, make certain the monthly payment is based on the same number of months, down requital, included miles and interest rate. When these figures change, the monthly requital will, besides. You can besides use the lease calculator to double-check the trader ’ mho figures as you gather quotes. Ask your salesperson for a breakdown of all the figures, particularly the interest rate and residual measure, that the quote is based on. ballyhoo in the numbers and see what you come up with.

In some cases, you might be pleasantly surprised to get quotes from dealers that are well below the act estimated using the calculator. This could be ascribable to a discounted sale price by the trader, special finance from the manufacturer or a stronger residual measure than you estimated. Often, manufacturers play with the leasing formula to offer a discounted monthly payment. This is sometimes referred to as a “ subvented lease. ”

Remember: it’s just an estimate

Because there are so many components in a lease sign, your results will vary. Don ’ thyroxine expect to calculate your lease payment to the dollar. But if you base your calculation on good data, you can get stopping point to the right come. then, if a dealer offers you an even better manage, you can jump on it .

source : https://www.peterswar.net
Category : Finance

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