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.
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.
posted by Al Hearn at 11:39 AM
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