Questions
How do you estimate a lease for a car for sale?
Makers advertise lease specials with fine print that gives the example car's MSRP, its net capitalized cost and its purchase option at lease end. From those we solve the program: the residual (the share of MSRP the car is worth at the end) and the money factor (the lease's interest rate). We then apply that program to each new car of the same model and year at its own asking price, with nothing down, before tax and fees.
What is a good lease?
Lease shoppers compare the monthly payment with the car's MSRP. Around 1% of MSRP a month, with the money due at signing spread over the term, is a strong lease; 1.25% is fair; above 1.5% is expensive.
Why is the estimate different from the dealer's quote?
Our estimate uses the top credit tier, the maker's base money factor and no money down. Dealers may mark up the money factor, add fees or include taxes, and lease cash can depend on where you live. Ask for the selling price, money factor and residual in writing and compare them with ours.
What is a money factor?
The lease's interest rate, written as a small decimal. Multiply it by 2,400 for the approximate APR: a money factor of 0.00125 is about 3% APR.
Want the next one by email? Save a search like new cars with a lease under $400/mo as an alert.