Lease Price Calculator

Lease Price Calculator

function calculateLeasePrice() {
var vehicleMSRP = parseFloat(document.getElementById(‘vehicleMSRP’).value);
var residualValuePercent = parseFloat(document.getElementById(‘residualValuePercent’).value);
var leaseTermMonths = parseFloat(document.getElementById(‘leaseTermMonths’).value);
var moneyFactor = parseFloat(document.getElementById(‘moneyFactor’).value);
var capCostReduction = parseFloat(document.getElementById(‘capCostReduction’).value);
var salesTaxRate = parseFloat(document.getElementById(‘salesTaxRate’).value);
var acquisitionFee = parseFloat(document.getElementById(‘acquisitionFee’).value);
if (isNaN(vehicleMSRP) || isNaN(residualValuePercent) || isNaN(leaseTermMonths) || isNaN(moneyFactor) || isNaN(capCostReduction) || isNaN(salesTaxRate) || isNaN(acquisitionFee) || vehicleMSRP <= 0 || leaseTermMonths <= 0 || moneyFactor < 0 || residualValuePercent 100 || salesTaxRate < 0) {
document.getElementById('monthlyPaymentResult').innerText = 'Please enter valid numbers for all fields.';
document.getElementById('upfrontCostsResult').innerText = '';
document.getElementById('totalDepreciationResult').innerText = '';
document.getElementById('totalFinanceChargesResult').innerText = '';
return;
}
// 1. Calculate Residual Value in Dollars
var residualValueDollars = vehicleMSRP * (residualValuePercent / 100);
// 2. Calculate Adjusted Capitalized Cost
var adjustedCapitalizedCost = vehicleMSRP – capCostReduction;
// 3. Calculate Depreciation Amount
var depreciationAmount = adjustedCapitalizedCost – residualValueDollars;
if (depreciationAmount < 0) { // Ensure depreciation is not negative
depreciationAmount = 0;
}
// 4. Calculate Monthly Depreciation Payment
var monthlyDepreciationPayment = depreciationAmount / leaseTermMonths;
// 5. Calculate Monthly Finance Charge
var monthlyFinanceCharge = (adjustedCapitalizedCost + residualValueDollars) * moneyFactor;
// 6. Calculate Base Monthly Payment (before tax)
var baseMonthlyPayment = monthlyDepreciationPayment + monthlyFinanceCharge;
// 7. Calculate Monthly Sales Tax
var monthlySalesTax = baseMonthlyPayment * (salesTaxRate / 100);
// 8. Calculate Total Monthly Payment
var totalMonthlyPayment = baseMonthlyPayment + monthlySalesTax;
// 9. Calculate Total Upfront Costs
var totalUpfrontCosts = capCostReduction + acquisitionFee + totalMonthlyPayment; // Includes first month's payment
// Calculate total depreciation and finance charges over the lease term
var totalDepreciationPaid = monthlyDepreciationPayment * leaseTermMonths;
var totalFinanceChargesPaid = monthlyFinanceCharge * leaseTermMonths;
document.getElementById('monthlyPaymentResult').innerText = '$' + totalMonthlyPayment.toFixed(2);
document.getElementById('upfrontCostsResult').innerText = '$' + totalUpfrontCosts.toFixed(2);
document.getElementById('totalDepreciationResult').innerText = '$' + totalDepreciationPaid.toFixed(2);
document.getElementById('totalFinanceChargesResult').innerText = '$' + totalFinanceChargesPaid.toFixed(2);
}
// Run calculation on page load with default values
window.onload = calculateLeasePrice;

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Understanding Your Vehicle Lease: A Comprehensive Guide

Leasing a car can be an attractive option for many drivers, offering lower monthly payments compared to purchasing, and the flexibility to drive a new vehicle every few years. However, understanding how lease payments are calculated is crucial to making an informed decision. Our Lease Price Calculator helps demystify the process by breaking down the key components that determine your monthly payment.

How Does a Car Lease Work?

When you lease a car, you’re essentially paying for the depreciation of the vehicle over the lease term, plus a financing charge (known as the money factor) and any applicable taxes and fees. You don’t own the car; you’re paying for the right to use it for a set period and mileage.

Key Components of a Lease Payment:

1. Vehicle MSRP (Manufacturer’s Suggested Retail Price): This is the starting price of the vehicle, often referred to as the “capitalized cost” in leasing terms. It’s the basis from which all other calculations begin.
2. Residual Value (% of MSRP): This is the estimated value of the vehicle at the end of the lease term, expressed as a percentage of its original MSRP. A higher residual value means the car is expected to depreciate less, which can lead to lower monthly payments.
3. Lease Term (Months): The duration of your lease agreement, typically ranging from 24 to 48 months. A longer term generally means lower monthly payments but also more total depreciation and finance charges.
4. Money Factor: This is the financing charge on a lease, similar to an interest rate but expressed as a very small decimal (e.g., 0.0005). To convert a money factor to an approximate annual interest rate, multiply it by 2400. A lower money factor means lower finance charges.
5. Capitalized Cost Reduction ($): This is an upfront payment you make at the beginning of the lease to reduce the total amount being financed. It’s similar to a down payment on a purchase and will lower your monthly lease payments.
6. Sales Tax Rate (%): Sales tax is typically applied to your monthly lease payment in most states, though some states may tax the entire capitalized cost upfront. Our calculator applies it to the monthly payment.
7. Acquisition Fee ($): Also known as an administrative fee, this is a charge from the leasing company for setting up the lease. It’s usually paid upfront or rolled into the monthly payments.

How the Calculator Works:

Our calculator uses these inputs to determine your estimated monthly lease payment and total upfront costs. The core calculation involves two main parts:

• Depreciation Portion: This is calculated by taking the (Adjusted Capitalized Cost – Residual Value in Dollars) and dividing it by the Lease Term. This covers the expected loss in the car’s value.
• Finance Charge Portion: This is calculated by multiplying the (Adjusted Capitalized Cost + Residual Value in Dollars) by the Money Factor. This covers the cost of financing the lease.

These two portions are added together to get your base monthly payment, to which sales tax is then applied. The total upfront costs include any capitalized cost reduction, acquisition fee, and your first month’s payment.

Example Scenario:

Let’s say you’re looking at a car with an MSRP of $35,000. The dealer offers a 36-month lease with a 55% residual value and a money factor of 0.0005. You plan to put $2,000 as a capitalized cost reduction, and there’s a 7% sales tax rate and a $595 acquisition fee.

• Vehicle MSRP: $35,000
• Residual Value (%): 55%
• Lease Term: 36 months
• Money Factor: 0.0005
• Capitalized Cost Reduction: $2,000
• Sales Tax Rate: 7%
• Acquisition Fee: $595

Plugging these numbers into the calculator would yield an estimated monthly payment and total upfront costs, helping you budget effectively for your new lease.

Use this calculator to compare different lease offers, understand the impact of various terms, and ensure you’re getting a deal that fits your financial goals.