03-25-2015, 09:19 PM
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#5 (permalink)
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Enthusiast Member
Join Date: Aug 2014
Location: Canada's Wet Coast
Posts: 480
Drives: '13 PW/Frost/Spt/AT
Rep Power: 12
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Residual
Quote:
Originally Posted by foss
One easy way to convert money factor to interest rate is to multiply it by 2400.
0.00197 * 2400 = 4.728
Also depends what sales price they are giving you. Residual is calculated of MSRP, so for example if MSRP is 42,000 * 51% = 21,420
If you get the car for 39,000(including fees) - 21,420 = 17,580 - 3000 down = 14,580/39months = 373 + interest + tax
That's approximate calculations, you can probably find a lease calculator somewhere online (edmunds, truecar, etc.)
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Close, but I think you pay interest on the residual amount over the lease's term and it becomes part of the monthly payment. Only the down payment reduces the amount of the interest you pay over the term.
Someone has to pay interest on the residual amount and it sure isn't the dealer.
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