1. What is Auto Lease?

Auto Lease is a contractual agreement between a lessee and a lessor that allows the lessee to use a vehicle for a specified period in exchange for regular payments.

2. How Does the Calculator Work?

The calculator uses the Auto Lease formula:

Where:

• \( C \) — Capitalised Cost ($)
• \( RVELT \) — Residual Value at End of Lease Term ($)
• \( L \) — Term of Lease Period (months)
• \( M \) — Money Factor

Explanation: The formula calculates the monthly lease payment by combining the depreciation component and the finance charge component.

3. Importance of Auto Lease Calculation

Details: Accurate auto lease calculation helps individuals and businesses understand their financial commitments, compare leasing options, and make informed decisions about vehicle acquisition.

4. Using the Calculator

Tips: Enter all values in the specified units. Capitalised Cost and Residual Value should be in dollars, Lease Term in months, and Money Factor as a decimal value.

5. Frequently Asked Questions (FAQ)

Q1: What is Capitalised Cost?
A: Capitalised Cost refers to the cost of acquiring an asset that is recorded on a company's balance sheet as a capital expenditure rather than being expensed immediately.

Q2: What is Residual Value at End of Lease Term?
A: Residual Value at End of Lease Term refers to the estimated value of the leased asset after the lease agreement.

Q3: What is Money Factor?
A: Money Factor is a component used in calculating the monthly lease payments for a leased asset.

Q4: How is the Lease Term measured?
A: Term of Lease Period refers to the duration for which the lease agreement is in effect, typically measured in months.

Q5: What factors can affect the Auto Lease calculation?
A: Changes in any of the input variables (Capitalised Cost, Residual Value, Lease Term, or Money Factor) will directly affect the calculated Auto Lease amount.