1. What is a Car Lease Payment?

A car lease payment is the monthly amount you pay to drive a vehicle you don't own. It's calculated based on depreciation, finance charges, and taxes divided by the lease term.

2. How Does the Calculator Work?

The calculator uses the lease payment formula:

Where:

• \( Depreciation \) — The vehicle's loss of value during the lease
• \( Finance \) — The money factor (interest rate equivalent)
• \( Taxes \) — Applicable sales taxes and fees
• \( Months \) — Length of the lease agreement

Explanation: The formula sums all lease costs and divides them equally over the lease term to determine the monthly payment.

3. Importance of Lease Calculation

Details: Understanding your lease payment helps compare financing options, budget effectively, and negotiate better lease terms.

4. Using the Calculator

Tips: Enter all costs in USD and lease term in months. Ensure all values are positive numbers with lease term at least 1 month.

5. Frequently Asked Questions (FAQ)

Q1: What's included in depreciation?
A: Depreciation is the difference between the car's capitalized cost and its residual value at lease end.

Q2: How is the finance charge calculated?
A: Finance charge = (Capitalized Cost + Residual Value) × Money Factor.

Q3: What taxes are included?
A: Typically includes sales tax and possibly other local taxes or fees.

Q4: What's a typical lease term?
A: Most leases are 24-48 months, with 36 months being most common.

Q5: Can I negotiate lease terms?
A: Yes, you can negotiate capitalized cost, money factor, and sometimes residual value.