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Car Loan Calculators With lease cars, a person pays the difference between what a car is worth today and what it is expected to be worth at the lease's end, plus a monthly fee to the finance company. In leasing language, today's value is called the "capitalized cost". Tomorrow's value is called the "residual value". The lower the capitalized cost and the higher the residual value, the better the deal is for the consumer. The monthly fee is calculated through the "money factor," which is similar to the interest rate paid on a conventional loan but expressed as a difficult-to-understand fraction. To convert a money factor to a recognizable interest rate, multiply it by 24. For example, a money factor of .00345 would be equivalent to roughly 8.3 percent interest. The money factor determines how much you pay the finance company each month for the privilege of driving that car. A consumer brochure on car leasing, available online from the Federal Reserve Board, will explain more. Changes in the Federal Trade Commission's rules on advertising consumer leases are summarized in this online brochure.  Whether buying a new car, or a used car, or selling a vehicle; first check KBB (Kelley Blue Book), Black Book, Red Book, or the NADA Used Vehicle Guide.  For complete information on all your financial needs, turn from Car Loan Calculators to the Loan homepage.  Car Loan Calculators. |