Estimate lease cash flow and residual exposure
Use this estimate to test the cash flow of financing an asset through a lease-style structure. Enter the asset price, upfront deposit, residual value, finance rate and term. The calculation is relevant to vehicles and equipment, but it does not determine whether a particular lease product is available or suitable.
The residual deserves as much attention as the monthly payment. A larger residual can lower regular payments while leaving more payable at the end. Compare the result with written quotes and make sure you understand who bears value risk, end-of-term choices and any conditions attached to the asset.
How to read the results
Estimated lease payment is the monthly amount calculated after allowing for the present value of the nominated residual. Financed amount is the price less the deposit, while residual is the amount still due at the end in this model.
Total cash cost adds the deposit, all monthly payments and the residual. Finance cost is that total less the asset price. Neither label includes GST, tax deductions, registration, insurance, maintenance, establishment fees, discharge charges or end-of-lease damage and kilometre charges.
Worked example
At the defaults, a $60,000 asset with a $5,000 deposit, $18,000 residual, 8.5% rate and four-year term produces an estimated monthly payment of $1,039. Total cash cost is $72,895 and finance cost is $12,895.
The $18,000 residual remains a material final cash requirement. The figures are rounded to whole dollars in the rendered result, while the calculation retains monthly precision.
Assumptions and limitations
- The deposit reduces the amount financed at the beginning of the term.
- The residual is discounted at the entered monthly finance rate.
- Payments are level monthly payments across the entered term.
- The finance rate does not change during the term.
- GST, tax treatment, asset running costs and contract fees are excluded.
Frequently asked questions
Is the residual included in the monthly payment?
No. It is allowed for when calculating the payment, then added separately as an end-of-term amount in total cash cost.
Can the deposit or residual exceed the asset price?
No. The calculator rejects those inputs, and it also rejects a residual whose present value exceeds the amount financed under the entered rate.
Does finance cost equal an interest charge on my contract?
Not necessarily. It is the modelled total cash cost less price and does not account for all contract charges, tax and GST treatment, or the timing of amounts under a particular agreement.
This calculator and supporting information provide general estimates only. They do not take account of every product rule, tax consequence or personal circumstance and are not financial, tax, credit or legal advice.