Lease Evaluator
Determine the Value of Any Car Lease Deal — Good or Bad
Use this Lease Evaluator to analyze any lease deal you may be offered by a dealer, find on a car maker’s web site, or see in a newspaper ad or on TV.
Also use it to determine the best lease deal for any vehicle, based on the vehicle’s sticker price.
Use the Down Payment amount specified in the advertisement or offer. If the ad only specifies the total amount due at signing, you’ll have to estimate the part that is the down payment by subtracting out the 1st month’s payment, and any fees that may be included.
Term, which is the length of the lease, should be 24, 27, 30, 36, 39, 42, 48, or 60 months. Any other term is non-standard and you should use the closest standard term for your evaluation.
If your Mileage Limit is more than 15,000 miles per year, you must evaluate your lease in two parts. Additional-mileage leases are always calculated as a normal 12K or 15K lease first, with the extra miles calculated as a separate add-on charge. If this is not specified separately in your lease deal, you should ask your dealer to break out the two parts of the deal separately. We can evaluate the normal 12K or 15K part, but you have to decide if you’re paying a fair price for the extra miles. Normally, the per-mile charge for the extra miles should be less than the per-mile rate you would pay at lease-end. Otherwise, there’s no benefit to paying for the extra miles in advance.
Monthly Payment is the payment amount, not including sales tax, specified in the ad or offer. Sales tax does not affect lease deal evaluation. Sales tax varies by state/locality and is not a factor in determining whether a lease deal is good or bad.
If you leave Monthly Payment blank, you’ll still get EXCELLENT / GOOD / AVERAGE / POOR lease payment ranges for your vehicle.
Since car lease ads and dealer offers usually don’t specify all of the key factors in leasing, how do we determine if the monthly payment figure represents a good deal?
The case-based method we use in the Lease Evaluator first calculates a POOR (“worst-case”) monthly lease payment, using the worst values for key lease factors — little or no price discount, no rebates, lower than average residual value, and high interest rate ( money factor).
Be aware, if the vehicle you want is a high-end luxury model, or a model that is in high demand and short supply, a POOR rated deal may be the best deal you can get, regardless of our other case calculations that might suggest you could get a better deal. If this is the vehicle you want, the POOR deal might be perfectly acceptable to you.
We then calculate an AVERAGE deal based on a modest price discount, but no special money factors or boosted residual values, and average interest rate. Dealers have no independent authority from the leasing company to negotiate or offer special money factors or residuals. Therefore, deals rated as AVERAGE are those that you would typically expect to receive from a dealer who is not offering manufacturer-sponsored (subvented) promotional lease deals on the vehicle you want. Promotional lease deals could easily rate in the GOOD or EXCELLENT range, or even better in some cases.
Car dealers do not have the ability to negotiate lease factors other than price. Unless you find, or a dealer offers, a lease deal that includes special incentives from the car manufacturer, your ability to get a GOOD or EXCELLENT rated deal is limited, although not impossible. By showing you the better deals, we are not suggesting that you should expect to actually get those deals except under special circumstances.
A GOOD deal is next calculated based on higher price discounts (up to 80% of dealer margin), improved money factors, and higher residual values. A GOOD deal usually means the dealer is getting hidden factory-to-dealer cash or other incentives from the manufacturer to improve the deal.
Finally, we calculate an EXCELLENT deal based on a highly discounted lease price, a higher-than-average residual value, and a very low money factor that you might reasonably expect to find in advertised limited-time deals subsidized (subvented) by car manufacturers and their finance companies.
To get an EXCELLENT deal, it is nearly always the case that the car manufacturer is contributing to the deal. Dealers simply can’t put together deals like this on their own — and customers typically can’t negotiate them. If you know that the manufacturer is not currently offering lease incentives, you should not expect to get an EXCELLENT deal. It’s not impossible, but highly unlikely.
Some users of our Lease Evaluator question why there is so wide a range between monthly payments for a POOR deal, GOOD deal, AVERAGE deal, and EXCELLENT deal. Let’s explain.
The answer is that there are three lease factors (price, residual, and money factor) that, when combined, can cause dramatic swings in monthly payment. Changing any one factor causes little change, but changing all three can cause significant changes. In our Lease Evaluator, no single factor changes more than about 10%, yet when all factors change by 10% at the same time, the monthly payment can change by much as 75%. As an exercise, use our Lease Calculator (www.leaseguide.com/calc) to plug in a variety of figures and see for yourself. This is why it so important to consider ALL factors in a lease deal, combined, not just price.
* Sales tax is not included in Lease Evaluator calculations since tax is not a factor in determining whether a lease deal is good or bad. Lease payments shown in dealer lease ads and TV commercials do not include sale taxes. Registration and tag fees, security deposits, and other fees are also not included in the calculations for the same reason.