Lease Calculating is HARD!

I normally don’t like starting blog posts with, “back when I was selling cars”, but today it’s appropriate soooooo….back when I was selling cars, there was one aspect of the business that drove me absolutely crazy – leasing.

Not that I thought leasing a vehicle was bad – quite the contrary as my last three cars have all been leases. It was trying to explain to a customer how the math around leasing worked and how their monthly payment was calculated that could sometimes grind my proverbial gears.

You see, if you’re a customer who plans on traditionally financing a vehicle, figuring out the monthly payment is quite easy – it’s just basic math. All you need to know is the loan amount, interest rate, and term of the loan. Plug in those three simple numbers and bingo-bango, you have your monthly payment. Heck, you don’t even need to be at the bank or dealership to figure it out. Just go to Google, search for car loan calculator, and Google will give you a dynamic calculator you can use right in the search results. Couldn’t be easier.

Google's Car Loan Calculator

Simply search car loan calculator on Google, and you can calculate your car payment.

But calculating lease payments? Not even the all powerful and mighty Google can figure that one out. Here’s why for those who may not know…

Calculate This!

Unlike calculating a monthly payment for a traditional loan, there are additional values that a consumer would have to know before they could even begin to figure out the math behind a lease payment. Those critical figures are known as the residual value and money factor. These numbers also aren’t easy to find in the wild either; typically only dealerships and financial institutions have access to such information.

And even if a consumer could secure those critical values, they’d still have to engage in the mind-numbing exercise of trying to figure out the adjusted capitalized cost and depreciation amount of the vehicle they were interested in.

If you really want to give yourself a headache, just look at the infographic below that shows the actual formula used to calculate a monthly lease payment.

Vehicle Lease Formula

I told you lease calculating was HARD!

So as you can see, as smart as Google is, they just couldn’t implement a lease calculator in their search results like they do their finance calculator because each make and model of vehicle that’s available to be leased has it’s own unique residual value and associated money factor as determined by individual lending institutions (whew that was a mouthful).

This is why as a sales professional it drove me crazy when my customers would ask how we came up with their $342 monthly lease payment when the ad for that lease on our website said it was $289 a month. More often than not, they didn’t simply accept “because that’s what the computer says?” for an answer.

Why is a Lease Calculator Important Anyway?

Dealer Inspire Payment Calculator Heatmap

Heat maps show that Payment Calculators are one of the most used tools found on a VDP.

You probably already have a payment calculator on your website for traditional financing, which is awesome because our data shows it’s the single most engaged-with tool on a car dealership’s website.

That makes perfect sense when you think about it because of all the questions a consumer is trying to answer during their car shopping journey, the “can I afford it?” question is one that’s on just about everyone’s mind.

In fact, 85% of all vehicles sold in 2016 were financed in some way, either through a traditional loan or a lease. This means the vast majority of consumers will answer the “can I afford it?” question by looking at the monthly payment to see how that works within their budget.

While lease penetration varies from region to region, the nationwide average for percentage of new car sales being leased came in just under 30% for Q4 2016 according to Experian Auto.

Think about it….that means that if you don’t have a lease calculator in your toolbox, you’re ignoring a third – or perhaps even more depending on your market – of the people who visit your dealership’s website.

Would you ignore a third of the phone calls that were made to your dealership? Or a third of the customers that walked through your door? A third of your form fill leads? Of course you wouldn’t. So why ignore a third (or more) of your online shoppers by not providing them with the most useful tool possible?

But We Already List Lease Payments on our Specials Page

Look, I know what you’re thinking, “But Jason, we already have a specials page with all of our current lease deals. Why do we need a fancy-schmancy lease calculator?”

Now don’t get me wrong here, lease specials pages are a great way to share valuable content with your visitors as well as give you a small SEO boost along the way. However, there’s one teeny-tiny, eensy-weensy problem with your lease specials page.

It’s dumb.

No, I’m not saying your specials page is stupid or a bad idea. I mean it’s dumb from the sense that there’s no technology behind it. It’s a static asset and it can’t dynamically adjust to meet each of your customer’s individual needs.

Take a look at this ad I randomly pulled  from a lease specials page and you’ll see what I mean.

Lease Specials Page Ad Example

A typical lease ad that you’d find on a Specials Page.

Ok, so here we have an advertised lease special for a 2017 Honda Civic Sedan LX CVT for $180 a month. If you’re a consumer looking at this, you can probably figure out that you’ll still need to pay taxes and fees on top of that. Oh, and since you aren’t a recent college grad (gotta read that fine print!) you’ll miss out on that $500 dollar incentive, so that’s going to bring the total up as well.

But this isn’t your first rodeo, so in the end you go into the dealership feeling reasonably confident that you could lease this specific vehicle for somewhere around $205 a month with about $2499 due at signing – prior to any negotiation.

In other words, as a consumer you’ve addressed the “Can I afford it?” question, and felt good enough to proceed along your car shopping journey.


What if the consumer wasn’t interested in the LX model? When it comes to the Civic, there are no less than seven different trim packages to choose from ranging in price from $18,700 to $27,400 – quite a large spread if you ask me.

The mile allotment per year is also another factor that can alter the monthly payment on a lease. This particular ad is for a 12,000 mile per year lease. But what if you only needed 10k? Or drove from Detroit to Chicago and back every other week (like someone I know)? Then you’d probably need 15k or even 18k miles per year on your lease.

Or what if a consumer only wants to put down the absolute minimum at signing instead of the required $1999? How would they figure out their payment then?

That little static advertisement, while nice-looking, just isn’t equipped to do anything other than tell you approximately what you can lease a very specific vehicle for, under very specific terms. If you change one tiny detail that entire ad becomes irrelevant, which leads to a poor user experience for your guests and for the most part doesn’t help answer their most burning question – can I afford it?

Do Something That Even Google Can’t Do

If I told you that I could show you a killer-feature for your website that even Google can’t replicate, would you be interested to discover what that is? Of course you would, because I just used my old school, Jedi-sales “if I could, would you?” word track on you. You have no choice but to listen to my pitch now!

If you’re on the Dealer Inspire platform, you have the ability to integrate our Lease Calculator product seamlessly into your website.

Dealer Inspire Lease Calculator

Website visitors can easily calculate multiple lease scenarios on the same vehicle.

Lease Calculator does the impossible. It syncs with your inventory and allows your visitors to calculate the lease payment on any of your in-stock vehicles. The data is pulled directly from the actual lenders, so even those pesky residual values and money factors are spot on. This gives your web visitors the ultimate tool to answer one of the most important questions that pop up along the car shopping journey….(say it all together now!) can I afford it?

The best part is that after your online shopper adjusts the terms and finds the perfect payment that they were searching for, they can Lock The Price of that vehicle which will in turn generate a lead for your team to immediately follow up on.

Remember, the leads that Lease Calculator generates for your dealership are high intention leads. Folks who meticulously structure their preferred lease deal on your website are mentally committed to visiting your dealership.

Search By Car Payment

Allow your customers to search by car payment with the Dealer Inspire Payment Calculator

Another amazing feature of our Lease Calculator is that it allows customers to search your inventory by monthly payment! By now the advantages of this should be apparent. If a shopper isn’t quite sure what vehicle they want, but they know what they can afford, you can serve up every vehicle in your inventory that meets their financial budget. Now THAT is powerful!

If you can give your online shoppers the tools they need to answer their most important questions, you’ll be ahead of your competition by leaps and bounds.

Request a personal demo of our Lease Calculator today, and one of our team members will be in touch with you right away!

Get Demo

Jason Stum
As the Director of Content Marketing at CARS, Jason draws from his hands-on dealership experience in Sales, Business Development, and Digital Marketing to lead a team in crafting actionable and insightful content for car dealers.

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