Finding the perfect car lease can feel overwhelming. With so many factors to consider, how can you ensure you’re getting a good deal? This guide provides a simple, effective method to compare lease deals and secure the best possible terms. We’ll break down the process step-by-step, using real-world examples and a straightforward formula to help you navigate the leasing landscape.
Understanding the “Bang for Buck” Metric
The key to comparing lease deals lies in calculating the “Bang for Buck” ratio. This metric, updated for the 2024 market, represents the value you receive for your monthly payment. It’s calculated by dividing the Manufacturer’s Suggested Retail Price (MSRP) by the true monthly payment, which includes all fees and down payments. A Bang for Buck score above 72 generally indicates a good lease deal.
The chart above illustrates how different Bang for Buck scores translate into deal quality:
- 90 & Above: Excellent
- 85 – 89: Great
- 80 – 84: Good
- 72 – 79: Fair
- Below 72: Bad
Aim for a score of 79 or higher in today’s market to secure a favorable lease agreement.
Calculating Your “Bang for Buck” Score: A Step-by-Step Guide
Let’s dissect the calculation process using a real-world example: a 2024 Toyota Camry LE lease offer.
Step 1: Gather the Necessary Information
You’ll need the following details from the lease offer:
- Lease Term (typically 36 months)
- Annual Mileage Allowance (usually 12,000 miles for mainstream cars, 10,000 for luxury)
- MSRP
- Advertised Monthly Payment
- Down Payment
- Acquisition Fee
Step 2: Calculate the “True” Monthly Payment
The advertised monthly payment often doesn’t reflect the total cost. To calculate the “true” monthly payment:
- Determine the Net Down Payment: Subtract the first month’s payment from the total down payment. If the acquisition fee is included in the down payment (as it is in our Camry example where the down payment is $3,548 and includes a $695 acquisition fee), no further adjustment is needed. If not, add the acquisition fee to the down payment then subtract the first month’s payment.
- Amortize the Down Payment: Divide the net down payment ($3,299 in our example) by the lease term (36 months) to get the monthly down payment cost ($91.64).
- Calculate the True Monthly Payment: Add the amortized down payment to the advertised monthly payment ($249 + $91.64 = $341).
Step 3: Calculate the “Bang for Buck” Score
Divide the MSRP ($26,275) by the true monthly payment ($341). In this case, the Bang for Buck score is 77, a fair deal but not exceptional.
Factoring in Mileage Adjustments
Standard lease agreements often include 12,000 miles per year for mainstream vehicles and 10,000 miles for luxury cars. If your desired mileage differs, adjust the true monthly payment:
- Mainstream Cars: Add or subtract $0.05 per mile difference over the lease term (36 months).
- Luxury Cars: Add or subtract $0.12 per mile difference over the lease term.
For example, a mainstream car lease with 10,000 miles per year instead of 12,000 would have 6,000 fewer miles over three years. This equates to a $300 adjustment (6,000 miles x $0.05/mile), or an additional $8.33 per month ($300 / 36 months), added to the true monthly payment.
Conclusion: Empowering You to Make Informed Decisions
By understanding the “Bang for Buck” metric and following these steps, you can confidently compare lease deals and negotiate the best terms. Remember to always clarify fees, mileage allowances, and other crucial details before signing any lease agreement. While finding a Bang for Buck score of 90 or higher might be challenging, aiming for 79 or higher positions you well in today’s market. Utilize online resources and tools, like TrueCar, to research current lease offers and secure a great deal on your next vehicle. Good luck with your lease hunting!
