One of the more common posts we see here are from people trying to utilize the LH Calculator and struggling to get the correct numbers. More often than not, this is the result of user error, so let this be a guide on how to use the calculator and what values go where.
With that said, a few starting notes. Read these 3 times before continuing:
- The calculator is not perfect, there are some limitations in how things are calculated.
- Do not expect to match an offer perfectly. There are often differences in how things are taxed or exactly how money is applied, so the numbers you’re getting are close approximations. A few hundred dollars of variation in total lease cost can happen.
- Details are important. If you don’t know a value, find it out.
- The numbers that are in the calculator to start with are DEFAULT values. You can not use them in lieu of the actual numbers and expect to get a worthwhile answer.
We will start by going through the items in the calculator line by line to better understand what each input is. This will be followed by a couple of examples.
Ok, let’s go.
When you open the calculator, you are greeted by this DEFAULT template.
This drop down menu lets you select which brand of vehicle is in question. This will provide some extra options down below for certain vehicles, like security deposits (and amounts), one pay leases, and auto populate the acquisition fee based on baseline prices.
This is the manufacturer suggested retail price for the vehicle. It is on the window sticker. This is the price before any discounts, mark ups, dealer add ons, accessories, or non-residualized items. In rare occasionas, residualized items are added to this value. The calculator will use this and the residual percentage below to calculate the residual value.
This is the selling price of the vehicle, before incentives. This the negotiated price of the vehice, pre-incentive, with any non-residualized items added on (accessories, wear and tear, etc). Dealers very often quote discounts that include incentives. Be sure to separate them out. A common error is to list a selling price here that includes incentives and add the incentives later in the calculator.
If you have a trade-in or are rolling in payments from a lease, add or subtract that from the selling price.
If you input a selling price, the % discount will automatically adjust. If you input a % discount, the selling price will automatically adjust.
This section includes the basic lease terms. These are generally available from the forums on edmunds.com specific to the year, make, and model of your vehicle. Be sure that you personally have asked for this information in your zip code. A very common error is using out of date information or information from a different region. Do not find someone that posted asking and use this. Get the information for yourself.
This is the number of months of the lease term. Update this value to reflect the term you’re calculating.
Miles per Year
This has limited value in the calculator. If you enter a residual value in the next section and then change the miles per year value, it will automatically adjust the residual value based on the difference in miles per year. When used properly, if you plug in the correct miles per year and then the corresponding residual value, you can quickly compare leases across different mileage limits by changing this value.
This is the value of the vehicle at the end of the lease term. It is critical that you plug in the correct residual value for the months and miles per year above. The dollar value amount will auto calculate.
This is the money factor, before MSDs, that the dealer is charging you. This is a value that is often marked up above buy rate, the number provided by the bank/edmunds. It is incredibly common for people to either assume the dealer is charging a non-marked up mf here or to enter the value after MSDs.
Depending on what vehicle make you selected at the top, you may see extra options here. These will become automatically available as applicable.
Demo Car Mileage
Generally, loaner/demo vehicles have a penalty charged to them based on their mileage. If you input the mileage here, the residual value will be automatically adjusted based on the mileage. You should use the new vehicle percentage above and enter the mileage here to automatically calculate.
This is not available for all brands. Volvo, for example, does not currently have this adjustment. If you’re calculated a demo on a vehicle that does not have this option in the calculator, add the residual value penalty amount to the selling price.
Multiple Security Deposits
If the brand allows for MSDs, you can enter the desired amount here. This will automatically limit you to the most amount allowed by the manufacturer and apply the appropriate MF mark down to the value for MF entered above. This is why you must enter the pre-MSD MF above. The calculator will not, however, prevent you from selecting more MSDs than are allowed on a vehicle with a very low starting MF. It will output the new MF
and warn you if you’ve selected too many.
Acquisition Fee Waiver/One Pay
When available, selecting one of these will auto adjust your MF to account for a one pay lease or an acquisition fee waiver.
Capital Cost Adjustment
Pay particular attention to this section This is a major source of error when using the calculator and a major source of confusion in general. It is critical that we delineate the difference between Down Payment and Due at Sale/Drive Off. Your Due at Sale/Drive Off amount is the out of pocket amount you pay when you sign the lease. This may include first month’s payment, taxes, fees, or capital cost reductions/down payments. This amount will be displayed later. Your Down Payment amount is an additional capital cost reduction. Different dealers calculate the due at sale amount differently. Sometimes they cover fees but taxes are rolled into the monthly payment. Sometimes the fees are rolled in and taxes aren’t. Long story short, the number in this section is UNLIKELY to match what actually ends up on the contract. Instead, as a work around to account for differences in how the dealers calculate, we adjust this value to make the Due at Sale/Drive Off amount closely match. One of the most common errors in using the calculator is a user who inputs the due at sale/drive off amount in the down payment section.
Again, the actual value inputted here does not matter. Adjust this (positive or negative) to make the Due at Sale/Drive Off value match the offer.
Earlier, you made sure to separate the pre-incentive discount from the incentives. Here is where they go back in. Be sure that you have independently verified the incentive amounts. Dealers often are not forthcoming about how their discounts are broken up. Edmunds should have provided this data when you asked for RV and MF. If an incentive is taxed or not will vary depending on what kind of incentive and your state. Generally if it’s a direct to dealer incentive (dealer cash, etc), it is untaxed and if it’s direct to you (rebates, lease cash, loyalty, conquest) it is taxed. This only applies for incentives that occur at the time of sale. Post-sale rebates are applied later.
Selecting this box will change your drive off amount to zero. This is a “sign and drive” or $0 das lease. Everything, including the first month’s payment is rolled in. You don’t pay anything until the second month.
Fees, Taxes, and Rebates
This is the acquisition or lease origination fee. When you selected the make at the top, this was autopopulated with the default value for that brand. Some brands have different prices per vehicle, some dealers (very common with Mercedes and Volvo) mark this up nominal amount, and this will be wrong if you’re using a non-captive bank. Adjust accordingly. Do note that often dealers do not mention this amount as part of their general fee breakdown when asked about costs. More often than not, when a dealer itemizes fees it is only dealer fees and tax/title/license fees.
The upfront box simply adds this in to the drive-off amount and can be ignored if you’re adjusting the down payment value to match a drive-off number.
This is generally the dealer doc fee.
This is your license, registration, smog, tire, other misc fees. Ultimately, any itemized fees other than the acquisition, disposition, or taxes need to be captured either here or in the dealer fees section. It doesn’t much matter, as long as they’re in one of these two.
This is for rebates that occur after the sale. Times when you receive a tax credit or a check back. This does not change the monthly payment but does change the total lease cost.
This is your local sales tax rate based on your registration address. It doesn’t matter where the dealer is located. In rare instances (the city of Chicago, for example) where there are additional taxes above the sales tax rate that are applied separately. Those should be added to the selling price, but are beyond the scope of this FAQ. In some areas, there is a different sales tax rate for leases than general purchases. Be sure you’re using the correct value.
Some states apply taxes in odd ways. These are the most common, but if you’re in a state that does things differently, it may be better to add the tax amount to the sales price. This doesn’t list places like Texas, that have very odd tax structures for lease or include places that have personal property tax amounts. Always best to verify the tax situation separately from the calculator.
Here we see what the lease actually costs.
This is the payment, before and after sales tax. In states where sales tax is charged upfront, these may be the same value. Be sure when looking at a dealer offer which number they’re referring to.
Pay particular attention to this section. This value not approximately matching the deal is one of, if not the most, common mistakes when using the calculator. This is your due at sale/drive off amount. How much you are paying in cash when you take delivery. The down payment amount should be adjusted to make this value match. The breakdown of what the drive-off is made up of may not match the dealer offer. That is ok. It’s the total amount that matters. Note that this does not include any rebate amounts. Dealer offers/contracts often display a drive-off that includes rebates. This is only the CASH due at sale.
If you’re applying MSDs, this is the amount due, in addition to the drive-off amount. It is not uncommon for this number to vary slightly from the dealer amount, depending on if the per MSD amount (1 monthly payment’s worth, rounded up) is calculated before or after MSDs are applied.
This is the amount due when you turn the vehicle in and is auto populated when you select the vehicle make. The value is used for calculating the total lease cost.
Total Lease Cost
This is perhaps the most important output; the total cost of all the monthly payments, drive-offs, and disposition fee.
This is the lease important output. This has very limited utility in evaluating a deal except for in very specific circumstances. If you’re reading this FAQ, ignore this value.
Share your numbers
Finally, if you want to share/post up your calculator for review, click the share your numbers button and copy the link it generates here. When opened, this will display your fully populated calculator. If you copy the url at the top of you window, it will not display the populated calculator.