How to read a lease worksheet, step by step

A lease is quoted in different words than a purchase. This order keeps you oriented. 1. Start with MSRP and the agreed value. The agreed value (also called the selling price or cap cost) is the negotiated price of the car. It is negotiable, exactly like a purchase price. 2. Watch how the cap cost builds. Gross cap cost = agreed value + anything rolled in (fees, taxes, add-ons). Adjusted cap cost = gross cap cost − cap-cost reduction (your down payment, rebates, or trade credit). The adjusted number is what your payment is actually built on. 3. Find the residual value. The residual is what the lease company expects the car to be worth at the end. It is set by the lessor and generally not negotiable, and a higher residual means a lower payment. Check the residual percentage against the term — 36 months is usually the strongest. 4. Find the money factor and convert it. Multiply the money factor by 2400 to compare it to an interest rate (0.00125 × 2400 = 3.0% APR). That is the interest rate of the lease, and it is worth questioning. Ask for the base money factor for your approved credit tier in writing. 5. Check the term and the miles. Term in months, annual mileage allowance, and the per-mile excess charge. Total contract miles = annual miles × term ÷ 12. Excess mileage at a quarter a mile adds up quickly. 6. Add up the fees. Acquisition fee (usually not negotiable), disposition fee (charged at the end if you don't buy the car or lease again), doc fee, taxes, and government fees. Ask whether the acquisition fee can be paid up front instead of rolled in. 7. Look at due at signing — and what's inside it. Ask for the breakdown: first payment, cap-cost reduction, fees, taxes, registration. More cash down lowers the displayed monthly payment but does not necessarily lower your total lease cost. 8. Total the real cost. Due at signing + (monthly payment × term) + disposition fee = your total known lease cost. Divide that by the term to get an effective cost per month. That is the number that compares fairly against another lease — or against buying. 9. Confirm what happens at the end. Purchase option (buyout) price, whether early buyout is allowed, and whether the disposition fee is waived if you lease again from the same brand. DealPilot reads a lease worksheet for you: it pulls out each of these, converts the money factor, and shows the total known lease cost and effective monthly cost beside any other offer you're considering.