Many times buyers are confused about the whole leasing process and the technical terms involved, such as Money Factor, Residual, Lease Acquisition fee, etc.. The leasing paperwork and calculations tend to be pretty complicated and it requires time to get all the detailed figured out. 

Many people just want a reasonable lease and don't want to learn all the ins and outs and are not concerned about squeezing every last penny. This article is geared towards those people.

  1. Multiply the MSRP by .92 to get the approximate dealer cost.
  2. Add $1500 to the answer in (1).
  3. Get the money factor and residual from the current month.
  4. Use the money factor plus .0002 .
  5. If you want, you can calculate the actual APR: Money Factor x 2400
  6. Use $625 for the lease aquisition fee.

Calculate the lease payment as follows :


Example numbers … MSRP $50,000, residual .6, money factor .00225 .

  1.  $50,000 X .92 = $46,000 . < — Approximate dealer cost.
  2.  $46,000 + $1,500 = $47,500 < — The cost of the car.
  3.  Money factor .00225 < — Money buy rate.
  4.  .00225 + .0002 = .00245 <– Your money factor Cap cost $47,500 + $625 = $48,125 ( adding the lease aquisition fee )

Residual .6 for 15k mile 3 year lease.

NOTE : if you lease for less miles you adjust the residual: add 2% to Residual for 12k mi/yr and 3% for 10k mi/yr on all terms

  • So the residual is $50,000 X .6 = $30,000
  • Monthly depreciation $48,125 - $30,000 divided by 36 = $503.47
  • Monthly interest $48,125 + $30,000 times MF of .00245 = $191.41
  • Monthly lease payment $503.47 + $191.41 = $694.88 PLUS TAX.
  • If sales tax is 7% total payment is $743.52

Drive off : 1st month plus $100 for registration or whatever equals $843.52.

Pretty simple, right?