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Also, you'll pay tax on whole car's price. Then, when you purchase (if you purchase) at the end of the lease, you'll pay tax again for the residual. That's the only bad thing.
gross capitalized cost = car price*tax + license + title fees + admin fees + etc
depreciation = gross capitalized cost - residual - down payment (if any)
rent charge = (((1+money factor*24)**(months of lease/12))-1) * depreciation
[the '**' is 'to the power of']
amount financed = depreciation + rent charge
monthly payment = amount financed / months of lease
initial payment = monthly payment + any security deposit
The above are to my best recollection/guess. The ETC above is any additional warranties, acquisition fees, etc. Watch out for those items, make sure you understand each. The ETC part is where you can be tricked (although my humble experience was a fair and square deal).
If you decide to purchase at the end, your car's price will be the residual from above. Then plug that into above formulae.
If you return the car, your charge will be any repair costs - security deposit. If that winds up less than 0, you get a check back. If more than 0, you get additional bill.
Cheers.
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Spunky
Last edited by bascelik; 08-31-2004 at 01:58 PM.
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