Vehicle Credit Resources

Glossary of Terms to help you.



  • MSRP ($) - MSRP is an abbreviation for the Manufacturer's Suggested Retail Price.  This is also sometimes referred to as the "sticker" price of the car because the MSRP appears as a sticker in the window of every new car sold in America.  Unless the car is in high demand, they are usually sold at a discount to the MSRP.
  • Negotiated Price of Car ($) - The negotiated price of the auto is also referred to as the base capitalized cost.  This is the negotiated price you'd be willing to pay for the car you're leasing if you decided to buy it from the dealer.  This is nearly always, the base capitalized cost is less than the MSRP.  This is the starting point for the lease calculations, before additional lease costs are added and reductions are subtracted.
  • Dealer Acquisition Fee ($) - The dealer acquisition fee is perhaps the most common of the additional lease costs you will encounter.  That's because nearly all new cars come with this charge that is typically in the $250 - $700 range.  It's the money charged to a customer for the dealership to generate a lease.
  • Extended Warranties ($) - When a car is returned under a lease, the dealership expects the car to be returned with "normal" wear and tear.  If the car is leased for a term that is longer than the manufacturer's warrantee (either in time or mileage), then you might want to pay for a contract to protect you against the cost of parts and labour.  Extended warrantees are also included as an additional lease cost.
  • Capitalized Cost Reductions - The capitalized cost reductions are things that are subtracted from the gross capitalized lease costs.  These can be in the form on dealer incentives or monies paid up front - such as a down payment.
  • Down Payment ($) - If you are lowering the amount you're going to finance by providing a cash down payment, then enter that amount here.
  • Trade-In Allowance ($) - If you are trading in a car as part of the deal, then enter the trade-in allowance negotiated with the dealership.  If you are not trading in a car, then just enter zero.
  • Money Factor - Car leases use a Money Factor in place of an interest rate on a loan.  In fact, if you take the money factor and multiply it by 24 you get the effective interest rate on the lease (multiply the answer by 100 to get convert the result to %).
  • Term of Lease (Months) - The term of the loan is the number of months over which the loan will be paid or the lease will exist.  This car lease calculator only works with lease terms of 24, 36 and 48 months.
  • Sales Tax (%) - This is your province's sales tax rate, if any.
  • Gross Capitalized Cost ($) - The gross capitalized costs are simply the total amount of capital - or money - that is part of the leasing agreement.  This is the starting point for all lease calculations.  Some of these costs are negotiated with the dealership - such as the base capitalized costs.
  • Net Capitalized Cost ($) - The adjusted or net capitalized cost of the lease is the amount of money borrowed over the course of the lease.
  • APR on Car Loan (%) - The APR calculation is derived from the money factor you've entered, where the APR (%) = Money Factor x 24 x 100.
  • Residual Value ($) - The residual value of the car is an estimate of the car's value at the end of the lease.  This particular calculator uses an average depreciation rate to calculate the car's residual value.
  • Depreciation ($) - Depreciation is the loss in the car's value over the course of the lease.
  • Finance or Rent Charge ($) - The finance or rent charges is the total of all fees paid over the course of a car lease that relate to the car's decline in value and the financing of the vehicle.
  • Sales Tax on Lease ($) - This is the sales tax due on all of the car lease payments.
  •  Total of All Payments ($) - If you were to add all of your payments associated with the lease, this would be the value.  This value accounts for depreciation, the rent or finance charge and sales tax.
  • Total Lease Payment ($) - These are the total costs associated with the lease itself.
  • Sales Tax Due on Down Payment ($) - This is the net taxes due calculated using the net of the down payment and trade in allowances times your state sales tax rate.  This is one of the up front costs that are due at lease signing.
  • Monthly Lease Payment ($ / Month) - This is the monthly lease payment required to recover the cost of depreciation and finance / rent charges.
  • Sales Tax on Lease Payment ($ / Month) - This is the sales tax due each month on the lease payment.
  • Total Monthly Lease Payment ($ / Month) - This is the total monthly lease payment associated with the automobile.  This includes payments due on the car's depreciation, financing and sales taxes (if any).



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