Understanding the auto lease calculator
A lease payment has two parts. The depreciation charge spreads the gap between the car's negotiated price and its predicted end-of-lease residual value over the term. The finance charge set by the "money factor" is interest on the money the leasing company has tied up. Multiply the money factor by 2,400 to see the equivalent APR; 0.0025 is 6%.
Two levers matter most when negotiating: the capitalized cost (negotiate it exactly like a purchase price) and the money factor (ask for it explicitly; dealers can mark it up). The residual is set by the leasing bank and is rarely negotiable a high residual is good for lease payments, since less depreciation is being financed.
Results are estimates for education only and are not financial advice.