Quote:
Originally Posted by peakjunkie
With all due respect, this is far too simplistic of an explanation and not accurate. The Leasehackr Calculator is the best one I know since shows how payments vary by state.
But essentially: Your Negotiated Price - (MSRP x Residual Value) = the amount you must pay over the length of the lease.
Then: (The amount you must pay / # of months) * Money Factor (interest rate) = monthly lease payments before tax, license, fees, etc.
Hope this helps - there are some super sophisticated people on this forum but also some inexperienced people that I would hate to see confused.
|
He's not wrong, he just answered what was asked:
Quote:
Originally Posted by Rupes
When calculating money factor as an interest rate, is the 4.512% calculated on the vehicle sale price + the residual value??
|
Which is
finance charge = (Capitalized cost + Residual Value) x money factor. Of course this is only one part to calculating your lease payment before taxes and taxable products. Depreciation cost is still required.