3. THE TRUTH IN LEASING ACT - PT. 2
PAYMENTS -
HOW AUTO LEASE VEHICLE DEPRECIATION AND AUTO LEASE RENT COSTS ARE RELATED
THE MOST IMPORTANT of all the REGULATION M disclosures are
the calculations that determine your monthly lease payment. Click on the top yellow portion the contract
image where Your Monthly Payment is Determined as Shown Below is highlighted.
DEPRECIATION: Every lessee pays for at least part, if not all, of the vehicle's depreciation during the lease term. The total depreciation is calculated by
subtracting the RESIDUAL VALUE from the ADJUSTED CAPITALIZED COST. All other lease figures are determined from the total DEPRECIATION and the
depreciation RATE. Click here to use our
LEASE CALCULATOR to see how your DEPRECIATION changes based on your MONTHLY PAYMENT and depreciation RATE.
RENT: Your total RENT is calculated by subtracting your total DEPRECIATION from your PAYMENT multiplied by the NUMBER of payments. Use the
LEASE CALCULATOR to see how your
vehicles depreciation rate affects what you pay in rent.
CAUTION: Unlike a loan where the interest rate (APR) must be disclosed a depreciation RATE is NOT a
required disclosure. In order to successfully negotiate a lease YOU MUST KNOW the DEPRECIATION and the DEPRECIATION RATE. Compare how
your Monthly Lease PAYMENT changes with the RATE of depreciation of the vehicle using an Adjusted Capitalized Cost of $20,000 with
a lease term of 48 months a TOTAL DEPRECIATION of $7976.47 in the table below:
| PAYMENT | 200.00 | 225.00 | 250.00 | 275.00 | 300.00 | 325.00 | 350.00 | 375.00 | 400.00 |
| RATE (%) | 2.54275 | 4.41538 | 6.28236 | 8.14386 | 10.00000 | 11.85095 | 13.69686 | 15.53789 | 17.37422 |
|
