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 consists of depreciation, finance charge, and taxes spread over the lease term.

2. How Does the Calculator Work?

The calculator uses the lease payment formula:

Where:

• \( Depreciation \) — Difference between car's value and residual value
• \( Finance\ Charge \) — Interest on the lease (money factor)
• \( Term \) — Lease duration in months
• \( Taxes \) — Monthly tax amount

Explanation: The payment covers the vehicle's depreciation during your lease, financing costs, and applicable taxes.

3. Importance of Lease Payment Calculation

Details: Understanding lease payments helps compare leasing vs. buying options and budget accurately for vehicle expenses.

4. Using the Calculator

Tips: Enter all values in USD. Term must be at least 1 month. For accurate results, use actual depreciation and money factor from your lease agreement.

5. Frequently Asked Questions (FAQ)

Q1: What's included in depreciation?
A: Depreciation is the car's initial value minus its predicted residual value at lease end.

Q2: How is finance charge determined?
A: It's based on the money factor (lease interest rate) multiplied by the sum of the vehicle's capitalized cost and residual value.

Q3: What taxes are included?
A: Typically sales tax on the monthly payment, but varies by state/local regulations.

Q4: Are there other lease fees?
A: Yes, most leases have acquisition fees, disposition fees, and possibly security deposits not included in this calculation.

Q5: How can I lower my lease payment?
A: Negotiate a higher residual value, lower money factor, or put down a larger capitalized cost reduction.