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Knowledge Hub · Leasing · Leases · 7 min read

Leasing vs. buying: the real math

Money factor, residual value and mileage limits, so you can decide if renting the car for three years is actually cheaper.

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Free preview · from the dealership side of the desk

The lease formula

Depreciation = (adjusted cap cost − residual) ÷ months. Rent charge = (adjusted cap cost + residual) × money factor. Payment = depreciation + rent charge + tax. Money factor × 2400 = the equivalent APR, so a .00250 money factor is 6%.

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In the full guide

  1. What moves the payment
  2. When leasing wins
  3. When buying wins
  4. The trap

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Keep reading

Lease vs buy: the real math

Cap cost, residual, money factor and the three-year total next to a loan.

‘Spot delivery’ and yo-yo financing

What to do when the dealer calls a week later saying financing fell through and you need to sign a new contract. 5 min · preview

Buying a car for an aging parent

Roles, budget, whose name goes on the title, signing with a power of attorney, and how to handle the dealership when the buyer is 78 and you live two states away. 8 min · preview

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