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Car Leasing Calculator | Step by Step Guide (ITS SIMPLE!)

hello everyone and welcome to drive

steady are you tired of getting high

payments in your car lease you thought

leasing was supposed to be affordable

right well today I'm going to show you a

quick and easy way to build your own

lease calculator using Microsoft Excel

to help you get that low monthly payment

you're looking for starting out with

just a couple of the basics so what is

car leasing it can be described as

paying for the depreciation of the car

over the term of your lease plus your

interest and your fees I know I know

you're saying all I care about as in my

lease payment right and yes but stick

with me here it will make sense you'll

need to know three basic things first is

the MSRP of your car second is the

residual value of your car at the end of

your lease term and third is your money

factor which is your interest rate

you're saying how am I supposed to find

out the least residual and the money

factor for the car I'm interested in

getting well I'm gonna tell you you go

to google.com you type in the year make

model of your car and you add lease

residual towards the end of it so for

example you're interested in a Mercedes

c-class go to Google type in 2019

Mercedes c-class

lease residual there are several search

results that have this information

however the one I find most valuable is

the one from Edmunds you're ready to

build your calculator let's jump right

into it so the first thing you're going

to need to do is obviously have

Microsoft Excel launched and the second

is to start typing in these words in

column a so residual money factor MSRP

selling price I like to skip a line here

residual residual value

depreciation cost interest cost total

without tax tax and monthly payment so

now that you've got these items here now

you're going to want to type in formulas

for these values here so residual value

equals B 4 multiplied by b2 and I'll

start explaining to you what these mean

once we start plugging in numbers so

depreciation is going to be b5

subtracted by b7 divided by 36 we're

gonna want to you're gonna want to put

an equal sign to make it a formula here

equal this is not your interest cost so

now we want to do b5 + B 7 multiplied by

B 3

now you get your now we're down to the

total without tax so b 8 + b 9

and now we're going to calculate the

text so this is going to be depending on

where you live so for this purpose I'm

going to type in nine percent tax and

type in my equal sign for some reason

I'm forgetting that and your total is

going to be B 10 plus B 11 all right so

you've got these formatted now your

formulas are in there now you've got to

plug in your numbers and this is gonna

be depending on the research that you

did that I mentioned earlier so when you

go to Edmonds and you get your residual

value and your money factor and your

MSRP is something you know just from

building price tools and general

research but so residual value that's

represented in a percentage so let's

call it 60 percent your money factor is

a decimal value let's call it point zero

zero one five two your MSRP let's call

it a $40,000 car and you negotiate a

$37,000 final purchase price which is a

three thousand dollar discount so you'll

see as you start typing in these numbers

the calculator is starting to calculate

your monthly payment so let's just start

going over it so your residual value is

B 4 multiplied by B 2 so that's your

MSRP multiplied by your residual this is

the price of your car at the end of your

lease this comes into handy if you're

purchasing your car at the end of your

lease and also comes into the

calculation so your depreciation cost is

your selling price of the vehicle

subtracted by the residual value so this

is the cost you're going to pay remember

there are two things the depreciation

cost and your interest cost plus the

other fees so the pre she asian cost is

361 dollars a month next is your

interest cost so you're going to take

your selling price and you're going to

take your residual value you're going to

add them together and multiply them by

your money factor so your money factor

is a representation of the APR so your

interest rate

if you want to know the exact interest

rate you take this number and you

multiply it by 2,400 and that'll give

you the exact rate that you're going to

pay so you're gonna pay ninety two

dollars and seventy two cents per month

in interest so now you've got the two

main items for your lease your

depreciation cost and your interest cost

you're gonna add these two together like

we did here b8 and b9 and you get you're

going to get four hundred and fifty

three dollars and eighty three cents

give or take now you're going to do the

tax so you take the total monthly

payment before tax you multiply it by

your local tax rate sales tax rate at

let's call it nine percent and you get

$40 so now you take that $40 and you add

it to the four hundred fifty three

dollars and you get a four hundred and

ninety four dollar monthly payment and

that's pretty much it pretty simple

right one thing to keep in mind is that

the monthly payment here does not

include the dealer fees licensing fees

DMV fees the reason why we didn't put

that in there is because for every state

for every county even it's different so

please pay attention to that and please

be aware that your monthly payment is

going to be a little bit higher here but

at least what this does is it gives you

a good baseline and when you include

your tax and title and I mean your

licensing fees and your DMV fees and

your county fees your pump your payment

shouldn't go up substantially maybe call

it another twenty thirty forty dollars

but that should pretty much be it like I

said this should be a good baseline for

you to get the payment that you're

looking for so that's your lease

calculator if you like what you see

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till next time

drive steady