Is my lease a good deal?
A plain-English walk-through of the four numbers that decide whether you're overpaying, and how to check each one in about five minutes.
The four numbers that matter
- Selling price. This is negotiable, same as buying. Compare it to the MSRP; a discount under 5-6% is worth pushing on.
- Money factor. The lease's interest rate, shown as a small decimal instead of a percentage. Dealers can mark this up above the bank's real rate; ask for the base rate.
- Residual value. What the car is predicted to be worth at lease-end, set by the bank. Not usually negotiable, but worth confirming it's correct for your trim and mileage.
- Fees and add-ons. The acquisition fee is set by the bank. Dealer-added packages (etching, fabric protection, nitrogen in the tires) are pure profit and usually removable.
A quick way to check the math
Multiply the money factor by 2400 to get an approximate APR. If a dealer quotes a money factor of .00285, that's roughly 6.84% APR — worth asking whether that matches your credit tier, since base rates for good credit are often noticeably lower.
Prefer to skip the mental math? Use the free lease calculator to convert between money factor and APR, or run the full payment breakdown.
Common questions
What is a money factor, really?
It's the lease version of an interest rate, just written differently. Multiply it by 2400 to get something close to an APR. A money factor of .00195 is about 4.68% APR.
Which fees can I actually negotiate?
The selling price, the money factor markup, and any dealer-added packages (etch, nitrogen, fabric protection) are usually negotiable. The bank's acquisition fee and government taxes typically are not.
Is a low monthly payment always a good deal?
No. A low payment can hide a high selling price stretched over more months, or a large drive-off payment. Compare the total cost of the lease, not just the monthly number.
What's a fair residual value?
It's set by the leasing bank based on the model, term, and mileage, not usually negotiable, but it's worth confirming it matches the bank's published number for your exact trim and term.
Don't want to check it yourself?
Send your actual quote and we'll check all four numbers for you.