Lease Calculator - Having Problems?

All lease calculators require that you insert certain information about the lease for which you want to calculate monthly payment amount and other costs.

Most of the needed information is basic and easily obtained for entry into a lease calculator. However, two of the required figures often leave users puzzled as to meaning and source.

First, there's residual value. This is the estimated wholesale value of a vehicle at lease-end. Although there are sources of estimated residuals, the values from these sources can vary greatly. Using one of these values is fine for use in a lease calculator if you are only using the calculator to play around and explore the effects of such factors.

However, If you need to know an actual monthly payment amount for an actual lease, you must get the residual value from your lease provider, which in most cases is a car dealer.

Second, there's money factor. Money factor is the finance rate for your lease, similar to interest rate on a loan. Except that money factor is expressed as a very small number, like .00200. It can be converted to APR interest rate by multiplying by 2400.

To get the money factor that will be used for a specific lease, you'll have to get it from your car dealer. Rates change frequently and depend on your credit rating. If you only need an estimated money factor for use in a lease calculator, I suggest you go to Bankrate.com and get their current new-car interest rate. Then divide it by 2400 to get money factor.

Why Use a Lease Calculator?

One of the most searched-for terms related to car leasing is "lease calculator". Since I have the most popular lease calculator on the Internet on my LeaseGuide.com web site, I know a thing or two about using them to the greatest advantage.

Based on comments and emails I've received, I have found that most people want a lease calculator for one or more of the following purposes:

1) To check the accuracy of a dealer's lease payment quote. Often, dealers calculate lease payments using figures that they haven't told the customer about. For example, extra dealer-profit fees may be added into the calculation. Unless the customer has a way to check the dealer's math, he will have no way of discovering the add-on fees.

2) To help determine an affordable vehicle price range for a lease. Since lease payments depend largely on vehicle price, having an online lease calculator allows playing around with various prices to see payment results. By finding the vehicle price range that produces monthly payments you can afford, you'll quickly find out if a luxury car — or economy sub-compact — is in your future.

3) To compare the cost of leasing versus buying. Although a lease-versus-buy calculator may be more appropriate here, many people already have a loan quote and simply want to compare that with a lease for the same vehicle.

Some people, I discovered, expected a lease calculator to do something that it can't do — tell them if their lease is a good deal or not. For that, we created a special kind of lease calculator (the Lease Evaluator, part of our optional Lease Kit) that actually evaluates a lease payment figure for a specific vehicle and spits out an analysis indicating if the deal is average, good, or bad.