# Tips in calculating car lease payments

Calculations for your car lease payments are usually done by dealers and other financial agencies offering  the lease. However, you might want to check on this to prove whether their calculations are correct or not. You can try reviewing their car lease payments calculation using the tips below.

1. Collect all of the figures you might need in calculating the monthly car lease payment. This could include the following:

• MSRP or the Manufacturer’s Suggested Retail Price
• The money factor or the interest rate placed on the lease
• The lease term
• The residual value of the vehicle where the lease is based

You can search for these figures online and by contacting the dealers or the credit institution providing the lease.

2. Calculate how much of the car’s value that you will be using. You can use the formula “CV=NP-(M*RV)” where CV is the value of the car that you will use, NP is the negotiated price, M is the vehicle’s MSRP, and RP is vehicle’s residual value.

For example, car you lease has an MSRP of \$25,000, the residual value is 40%, and the negotiated price is \$23,000, then you might be using \$13,000.

3. Break the value of car down into monthly payments by dividing it with the lease term. Using the example given previously and the lease term is 36 months the monthly payments would likely be \$361.11.

4. Calculate the interest involved on the lease by multiplying the money factor with the sum of the MSRP of the vehicle and its negotiated price. Using the example above and given that the money factor is 0.03, the calculation would likely be (25,000+23,000) x 0.003=144. The interest portion on your monthly payments is \$144.

5. Using the figures from the previous examples, your monthly lease payment minus the taxes and additional would likely be around  \$505.11 (\$361 for the actual payment plus \$144 for the interest)

6. Multiply the actual monthly lease payment with applicable state sales tax to obtain the monthly lease tax. Add this to the actual monthly lease payment to determine the amount you need to pay for the lease each month minus the additional fees involved.

7. In order to make the lease estimate more accurate add the amount paid for the additional fees charged by the lease provider. You can do this by factoring the other fees involved such as the security deposits and down payments.

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