Vehicle Lease Agreement FAQ - United States

Vehicle Lease Agreement FAQ - United StatesVehicle Lease Agreement FAQ - United StatesVehicle Lease Agreement FAQ - United StatesVehicle Lease Form FAQHow are monthly payments calculated?There are two components of the calculation, the lease payment and the interest owed.The lease payment calculation is as follows(Price - Residual Value) / Term of the LeaseThe price is the cost of the vehicle, minus any trade in rebate or cash back.The residual value is the value of the vehicle thats left on the vehicle at the end of the lease. Typically, its 35 to 58% of the full retail value.Term of the lease is how long the lease is for, typically measured in months and its at least 12 months.The interest payment calculation is as follows(Price + Residual Value) x Money FactorThe money factor is calculated by taking the interest rate and divided by 2400. (e.g. 7% is 0.07, the money factor for 7% interest is 7/2400, which equals to 0.0029.What is the money factor?It is the interest rate used in th e calculation of the Lease. It is the interest rate divided by 2400. For example, if the interest rate is 7%, the money factor would equal to 7/2400, which is 0.00292.What is supplementary warranty?It is warranty for repair from either the Lessor or a third cocktailparty that is in addition to the manufacturers warranty. It will commence upon the expiration of the factory warranty from the vehicle manufacturer.