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 We're starting to shift the focus of our car buying section over to car leasing, so we thought it would be appropriate to share with you a car lease calculator. What we have to offer at this time is a spreadsheet (Excel) that you can use to calculate monthly car lease payments.
Car Lease Spreadsheet
The car calculator we've put together is a spreadsheet that's just as sophisticated as some of the other online versions you'll find out there. Since we're offering ours as a free tool that you can download, we think ours offers you more flexibility than some of the other calculators.
The remainder of this article will be dedicated to offering you instructions on how to use the calculator. We'll also take the time to explain some of the terminology you might encounter when dealing with a car lease. Finally, where appropriate, we've offered you some example values or suggested values to use in the spreadsheetcalculator.
Instructions for Using the Car Lease Calculator Instructions
You can download our calculator by clicking on the following link: Car Lease Calculator. After you've opened the spreadsheet in Exce (the spreadsheet should also work in OpenOffice Calc or Lotus 123), you will notice that the calculator already contains information we've filled out as a car lease example. You're simply going to overwrite the values in the calculator with your lease information.
Where the cell value is "blue" that indicates a need for an input value. The remaining cells are used for spreadsheet calculations or explanations.
Gross Capitalized Cost
The first value that we are going to calculate is the gross capitalized cost of the vehicle. The important inputs include:
- MSRP - Manufacturers Suggested Retail Price or sticker price of the car. If you are just starting your car lease search, then you can find this value at the manufacturer's website.
- Base Cap Cost - the base capitalized cost is the negotiated price you'd be willing to pay for the car. This value is usually less than the MSRP unless the car is experiencing extremely high demand and low supply.
- Additional Lease Costs - dealer acquisition fees are nearly always includeding in a lease contract. Other items such as extended warranties might also be purchased as part of the overall deal. For example, you might want to purchase an extended warranty for a 48 month lease on a car with a 36 month manufacturer's warranty.
Capitalized Cost Reductions
Our next step in calculating the lease payments is to figure out the how much capital, or money, you are willing to put down on the lease. This is known as the capitalized cost reduction. The larger these up front payments, the lower the monthly lease payments. Generally, there are two ways to reduce capital:
- Down Payments - this is cash (usually in the form of a bank check) that you are willing to put down on the car. Many leases will specify a minimum down payment.
- Trade In Allowance - if you own a car and are willing to trade it in as part of the lease, you can take that allowance on this line in the calculator.
Lease Terms and Taxes
In this section you are going to provide some of the lease terms that you've been offered by the car dealership or perhaps have seen in an advertisement.
- Residual Value - in case you don't know the residual value of a car, we've provided a calculation based on the lease term or length. If you know the actual residual value, just overwrite our calculated value.
- Money Factor - a money factor is the equivalent of an APR on a loan. In fact, if you take the money factor and multiply it by 24 you get the effective interest rate on the lease. Likewise, if you divide the interest rate by 24, you can calculate the money factor.
- Lease Term - the lease term is simply the length of the lease, stated in months.
- Sales Tax - this is the sales tax charged in your state.
Calculation of Lease Cost
In this section of the car lease spreadsheet, we are going to compute the total of all out-of-pocket payments associated with the lease. This is the total amount of money that needs to be provided as part of the lease.
- Depreciation - this is the loss in value of the car over the term of the lease. For a car lease, depreciation is simply the net capitalized cost minus the car's residual value.
- Finance or Rent Charge - this is the rent charged on the car over the life of the lease. This considers the car's value, the money factor, and the term of the lease.
- Sales Tax on Lease - just in case you were wondering, you need to pay state sales tax on car leases too.
- Total Lease Payment - this is all of the money you need to pay out as part of the lease. It includes sales tax, rent charges, depreciation, trade-ins, and down payments.
Calculatingon of Monthly Car Lease Payments
This is the part you've all been waiting for - an estimate of your monthly car lease payments. We're not going to cover this output line by line because we've explained all these concepts already. Basically, this section converts the lease costs into monthly payment by dividing those values by the term of the lease.
Our suggestion is to print out a copy of these instructions and use them when you're using the car lease calculator spreadsheet. We think it's a great tool that you can use to play "what if" scenarios and see their affect on your monthly payments. Keep in mind this tool is not intended to replace calculators used by dealerships, rather the intention here is to provide consumers with better information so they are better prepared when they negotiate with leasing companies.
Online Car Lease Calculators
If you'd rather use an online car lease calculator, we can help there too. In fact, we've got a complete line of car loan and lease calculators that you can use access for free. Included in that offering is our online car lease calculator that follows the same format as the spreadsheet described above and all of our online tools come complete with instructions.
About the Author - Car Lease Calculator
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