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      09-04-2010, 08:49 PM   #2
w2
Private First Class
Canada
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143
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Drives: 335i coupe
Join Date: Apr 2008
Location: Ottawa, Canada

iTrader: (0)

I don't have an Excel version, but the formula is (relatively) straightforward:

N = total negotiated price, before taxes, but including all other fees and extras.

C = capitalization cost reduction (e.g. 0 if you are putting $0 down)

P = net price = N - C

R = residual value at the end of lease (vehicle MSRP * residual percentage, regardless of the actual negotiated price, and not including any taxes, freight and PDI, or extras, so for example, on a 335i sedan with metallic paint, a 52% residual is $52,200 * .52 = $27,144)

T = lease term in months (e.g. 36)

M = money factor (APR / 24, so 3.9% = 0.039 / 24 = 0.001625)

D = monthly depreciation cost: =(P - R) / T

F = financing charge =(P + R) * M

P = monthly payment = D + F

P does not include taxes (multiply by 1 + tax rate to get total monthly payment. E.g., in Ontario, Pt = P * 1.13)


Also worth noting is your average monthly cost:

((Pt * F) + C) / F

And total cost over the lease period:

(Pt * F) + C

Not counting any lease turn-in fees or costs for excess wear and tear, replacement tires, etc.

That should be correct, though my brain is not exactly in math mode tonight.