Quote:
Originally Posted by Hehe
But you did borrow that money. There's nothing shady about the math of lease itself which is (depreciation+financing cost)/term.
TBH though, only 3 things matter in a car lease agreement: final negotiated price, interest rate and residual value. Everything else is derivative from these 3 numbers. Just focus on getting the first 2 as low as possible. For the residual, you want to get high as possible (usually fixed if dealing with manufacturer, but when you are comparing 2 different cars, it makes sense to see which one offers higher residual).
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The residual value? I didn't borrow that? I put a down payment and borrowed the second portion of the purchase price. But interest is calculated like this.
($500/month * 36 + residual value) * 2.9% APR
not gonna go into the compounding stuff, just showing an example of how interest is calculated on a lease vehicle.