function calculateLeasePayment() {
var msrp = parseFloat(document.getElementById('msrp').value);
var downPayment = parseFloat(document.getElementById('downPayment').value) || 0;
var residualPercentage = parseFloat(document.getElementById('residual').value);
var term = parseInt(document.getElementById('term').value);
var mf = parseFloat(document.getElementById('moneyFactor').value);
var taxRate = parseFloat(document.getElementById('salesTax').value) || 0;
if (!msrp || !residualPercentage || !term || !mf) {
alert("Please fill in all mandatory fields with valid numbers.");
return;
}
// 1. Calculate Residual Value
var residualValue = msrp * (residualPercentage / 100);
// 2. Adjusted Capitalized Cost (Simplified for this calculator)
var capCost = msrp – downPayment;
// 3. Monthly Depreciation
var monthlyDepreciation = (capCost – residualValue) / term;
// 4. Monthly Finance Fee (Rent Charge)
var monthlyRentCharge = (capCost + residualValue) * mf;
// 5. Subtotal
var basePayment = monthlyDepreciation + monthlyRentCharge;
// 6. Total Payment with Tax
var taxAmount = basePayment * (taxRate / 100);
var totalMonthly = basePayment + taxAmount;
// Display Results
document.getElementById('leaseResult').style.display = 'block';
document.getElementById('totalPayment').innerHTML = '$' + totalMonthly.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('depreciationVal').innerHTML = '$' + monthlyDepreciation.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('rentVal').innerHTML = '$' + monthlyRentCharge.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('taxVal').innerHTML = '$' + taxAmount.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
}
Understanding Car Lease Calculations
Calculating a car lease payment is more complex than a standard car loan. Instead of paying for the entire value of the vehicle, you are essentially paying for the portion of the vehicle's value that you "use up" during the lease term, plus interest and taxes.
Key Factors in Your Lease Payment
MSRP: The Manufacturer's Suggested Retail Price. This is the starting point for negotiations.
Residual Value: This is the estimated value of the car at the end of the lease. A higher residual value usually results in a lower monthly payment because you are responsible for less depreciation.
Money Factor: This represents the interest rate on the lease. To convert a money factor to a standard APR, multiply it by 2400. For example, a money factor of 0.00125 is equal to a 3% APR.
Depreciation: This is the difference between the car's initial price (Cap Cost) and its residual value, spread over the length of the lease.
Example Calculation
Imagine you are leasing a car with an MSRP of $40,000. You put $2,000 down, leaving a capitalized cost of $38,000. The leasing company sets a 36-month residual of 60% ($24,000). The money factor is 0.0015 (3.6% APR).
To get the best deal, focus on negotiating the sales price (gross capitalized cost) rather than just the monthly payment. Additionally, look for cars with high residual values and special promotional money factors offered by the manufacturer's captive finance arm.