Insurance, maintenance, mileage limits and end-of-lease charges are not included.
How a lease payment is calculated
A lease is a loan on the part of the car you use: the price minus the down payment, minus the residual value the car is expected to have at the end. You pay interest on the whole amount, so the payment is an annuity with a "balloon" (the residual value) at the end.
At the end of the lease
Hand the car back: you have paid the down payment and the monthly payments.
Buy it: you also pay the residual value.
Extra kilometres and damage are charged when you hand it back.
Frequently asked questions
Why is a lease payment lower than a loan payment?
Because you do not pay off the residual value during the lease. If you then buy the car, you pay it at the end.
What residual value is realistic?
For a new car over four years, often 40 to 50 % of the price. The lessor sets it in the contract.
Is leasing cheaper than buying?
Rarely if you keep the car for a long time. Compare it with a loan in the lease or loan calculator.
Indicative results. This is not financial advice.
Know how much you will have left at the end of the month
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