Calculating a lease payoff/buyout

Ask the Hackrs
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I’m trying to make sure I’m understanding what needs to be paid if we trade-in our Lease early.

We have a 2023 Lexus that we leased over a year ago and the monthly payments are higher than we would like. Plus leasing EVs is so cheap now compared to when we got this one.

Is the calculation as simple as the residual value plus the remaining payments (minus taxes?).

We are in SoCal and it’s a Lexus RZ450e, paying about $840/mo with taxes. 22 payments left.

My parents are considering the same with their RZ450e, though they are about 3 more payments into theirs.

Thank you!

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Sign into your LFS account and generate a payoff statement

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Don’t be surprised if there’s negative equity

And even in 2023 there were much better EV values than a RZ for $840. Don’t repeat the same mistakes

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Nope. If you read the lease contract under early termination- purchase, it will reference the terms adjusted lease balance (ALB) and constant yield rate (actuarial rate) CYR which is the lease amortization rate. You need to determine the CYR and the ALB. Excel has two functions that will enable you to compute the CYR called RATE and the ALB called PV (present value).

CYR = RATE(term, adj. cap, - base monthly payment excluding tax, - RV, 1)

ALB = PV(RATE, # of payments made, - base monthly payment exclu tax, -RV,1)

RATE or CYR is a monthly rate since payments are monthly and interest is compounded monthly.

RV = Residual Value

Lease Balance = ALB as reported by your fund provider. If there is a disparity of more than a few dollars, then something is very wrong. Assumes all payments are made on time.

??? Let me know.

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840 for a RZ. Good lord

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Thanks for the tips, all!

The payoff says:

Purchase Your Vehicle

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/default-vehicle.png933×333 65.1 KB

2023 lexus RZ450E

Lease Ending: H862

Purchase Amount

$41,826.82

info icon|17pxx17px

Valid Through

01/03/2025

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As this thing is 38k on car gurus, i would say you are at least 5k underwater right now.

Transfer out on swap a lease if you can

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Will need an incentive at $840 per month.

Now it’s a question of which check would be larger

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My parents might be moving on this 1st and we have been very busy with medical issues of late.

My parents are looking to move to a Lexus Plugin Hybrid lease so it should be easier for them.

My wife and I won’t be going back to Lexus unless they get a compelling product someday. So it might be more difficult for us.

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