This is where buyers unfamiliar with how a lease works start to sweat. But don't sweat, The BOSS has you covered. Let's break it down.
Residual value (RV) serves two purposes. First, the difference between what you pay for the car and RV (known as depreciation in industry jargon) is used to calculate your monthly payment. Second, it’s what you’ll pay if you want to buy your car at the end of your lease.
RV is most often quoted as a percentage of MSRP. It varies based on the car, the mileage, and the term (duration). So for example, a 36-month lease on a car with $25,000 MSRP might have an RV like the following:
RV is set by the leasing company and is non-negotiable. Ask the dealer for this number. Or better yet, do your own research online. Note that The BOSS let's you enter either the RV percentage or an actual RV $ amount.
Check this LINK for more about Residual Value.
Money Factor is just another term for interest rate. It will be quoted as decimal number, something like .00142. Multiply by 2400 and that's your interest rate. Why the gymnastics? Nobody knows. But dealers don’t mind because it confuses customers.
Note that some leasing companies (notably Ford) work with interest rates instead of money factor. Not to worry. The BOSS lets you enter either value.
There’s a quirky formula to calulate monthly finance charge for a lease (known as rent in yet more industry jargon). But no worries, The BOSS takes care of this for you. Your job is to find out what is the Money Factor for your deal.
The leasing company sets the Money Factor and it is non-negotiable. And it can vary based on your credit rating. Once again, get the number from the dealer. Or do your own online research.
Here's a short VIDEO about Money Factor.
This is the # of months you are leasing the vehicle for. Most leases run for either 36 or 39 months.