Lease A Bmw Rather Than A Pontiac For The Same Monthly Payment, Simply By Comparing Relative Residua

Here are the definitions to help evaluate vehicle residual values

• Vehicle residual value
  This is the value that the manufacturer, not the dealer, says the car will be worth at the end of the lease. Sometimes it is a percent, such as 60% of the MSRP, the price of the car. A $20,000 car with a 60% vehicle residual value would have a residual value of $12,000.
  
  The lease contract says you can rent this $12,000 for x years by simply paying a percent, such as 4% of the $12,000, or .04 times $12,000 divided by 12 months or $480/12 equals $40/month
  
  
• Amortization
  The $8,000 left (the $20,000 car price minus the $12,000 residual value) is a standard loan, just like a house mortgage, which requires a monthly payment for not only the interest but also a little of the $8,000. This will always be a much larger payment than the interest paid on the residual value.

• The easy way
  On the Internet, search for any manufacturer's web site and simply find a lease payment by focusing on any higher quality car costing a few thousand collars more than your initial choice. Ignore the fact that the residual value is not given. What you're really after is a monthly lease payment on a Vehicle B that is the same, or almost the same, as the lease payment on the initial vehicle A that you chose.
  
  
• The hard way
  To narrow your search for a secondary choice, be sure to limit it to a vehicle that has a higher residual value percentage. Because few car manufacturers will provide the residual value on the Internet, go to other sites that do offer this information. To get the percentage residual value, divide the vehicle residual value by the MSRP and you have the percent. Example: 12,000/20,000 equals 60%.
  
  After initially deciding on what car to lease, get a lease proposal on a different make that costs as much as $5,000 more. You can do a lot of this secondary searching on the Internet. Make sure each choice has similar features and that neither one is loaded with a lot of optional accessories.

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