The adjusted lease balance needs to be calculated.
An adjusted lease balance is a portion of the adjusted capitalized cost of your car lease that is still on your lease.This is how much you owe on your lease right now.The balance on the lease is calculated using a standard industry-wide method.The balance is usually the main part of the payoff amount if the car lease is terminated before the end.It is a good idea for you to calculate this amount in advance so that you are aware of what your payoff will be for turning a leased car back to the dealer.
Step 1: You can request information from your dealer or lease provider.
You will need to calculate your lease value and monthly payments first.You will need some information to do that.Inquire about the manufacturer's suggested retail price for the vehicle from your lender or dealer.Your vehicle's sale price.There are incentives provided on your lease.There is a residual value for the vehicle.There is a lease duration and a number of months remaining.Money is a factor on your lease.The figure is similar to an interest rate.
Step 2: The criteria for early termination is included in your lease agreement.
If you read the agreement, you will be protected against calculation errors on the funder's part.Compare the figures in your agreement to the information you just received.Administrative charges and taxes are included along with any resale charges or expenses.Make sure that the residual value for the vehicle is in line with the value given to you by the lender or dealer in your agreement.If a lease is terminated early, a charge may be assessed by the dealer.Depending on how many months of payments remain on the lease, this charge may be in the form of several months' worth of lease payments.
Step 3: Check your account for past due payments.
The cost of ending your lease will include any late lease payments.Check your lease payment history for these payments.
Step 4: Search for your monthly lease payment.
The monthly lease payment is what you have been paying for your lease.The amount can be found on your lease bills.If you haven't gotten the lease yet.Adding the vehicle's monthly depreciation plus the monthly finance charge can be used to calculate your monthly lease payment.Subtract the residual value from the capitalized cost of the vehicle to calculate the monthly depreciation.The capitalized cost of the vehicle is the amount of money the lender borrowed for the lease.A $40,000 car might have sold for $37,000, and then be further reduced by $2,000 to $35,000.The cost is capitalized.Your lease agreement states the residual value.The stated residual value is $20,000 for a $35,000 vehicle.The total depreciation over the life of the lease would be between $20,000 and $15,000.Assuming a 5-year lease, the monthly depreciation would be between $15,000 and $250.The capitalized cost and depreciation charge are added together to calculate the finance charge.Imagine that the lease has a money factor of zero.The monthly finance charge is $55.The monthly finance charge should be added to your monthly depreciation to get the monthly payment.$55 + $250 or $305 is what this would be.
Step 5: How many months are left on the lease?
It is possible to work out the number of months left on your lease.Ask your lender or dealer how many months of payments remain on the lease.You can subtract the number of months you have paid from the total lease duration.If you've paid 3 years 36 months for a 5 year lease, you have 60 or 24 months left.
Step 6: The number of months is calculated by the monthly payment.
You can get your adjusted lease balance by taking the number of payments you owe and dividing them by your monthly payment amount.If you use the example of 24 months remaining on a five-year lease with a $305 monthly payment, you would have a lease balance of $7,320.
Step 7: Your lender will confirm your lease balance.
Rent charges in your lease may affect your adjusted lease balance.The calculations may be different due to the actuarial method used by the lender or dealer.If you want to know your adjusted lease balance, call your lender or dealer.
Step 8: You should check your lease agreement for the residual value of your vehicle.
The lease agreement defines the residual value.At the end of the lease term, it is the lender or dealer's estimated value for the vehicle.This may be higher or lower than the actual value of the vehicle in the current market when you end your lease, but is still used in determining your termination costs.
Step 9: Take the realized value of the vehicle.
The realized value can be used to measure the value of the vehicle at the end of your lease.The fair market value of the vehicle may be calculated through other means, such as in the lease agreement.At a wholesale or retail auction, the highest bid is for the vehicle.If the vehicle is damaged in a collision, the insurance will pay for a total loss.
Step 10: Expenses, fees, and lease balance should be combined.
To arrive at a fee total, add up the charges, taxes, unpaid amounts, and resale expenses.Add your lease balance as calculated by you or your lender.The residual value is specified in your loan agreement.The money that you owe is represented by this number.Imagine that you owe $2,000 in various fees and expenses, along with a loan balance of $7,320 and a residual value of $20,000.At this stage, your total would be between $2,000 and $7,320.
Step 11: Subtract the value that was realized.
The realized value is subtracted from the previous total to arrive at the early terminated cost.The residual value in the lease agreement is dependent on the market value of the vehicle, so keep that in mind when calculating your realized value.Imagine if you will that the realized value for the car in the previous example is $28,000.
Step 12: You should arrive at an early terminated cost.
If you end your lease early, you owe the lender or dealer an early termination cost.This would come to $29,320 or $28,000.Transferring the lease to someone else avoids the fee.