What is Considered a Good Lease Deal?

When comparing lease deals, here's a quick and simple way to determine if it's a good deal or not. All of the information below is updated to take into account current market conditions as of 2024.

Basically, all you need to do is figure out the "Bang for Buck" for your lease deal. This is simply the MSRP divided by the true monthly payment (I show you how to calculate all of this below). Basically, if your "Bang for Buck" is above 72, it's considered a good lease deal.

The "Bang for Buck" Lease Deal Chart

Having gathered all 351 manufacturer lease deals currently available, I've calculated the "Bang for Buck" figure for each one. The average Bang for Buck is 74.21, while the median is 72 (meaning half the deals are 72 or below and the other half 72 and above). Here's a chart showing the results:

Any lease with a "Bang for Buck" of 72 or higher is a better than average lease deal. A good lease deal is anything 80 or higher, which would put you in the top 25% of all lease deals

How to Calculate "Bang for Buck"

The formula for calculating "Bang for Buck" is very easy: MSRP divided by "true" monthly payment. The hardest part is calculating the true monthly payment, which must take into account any down payment, acquisition fee, and annual mileage differences. But it's not really that difficult, I'll show you how using a real lease deal example below...

But First, The Basics

A couple of things to keep in mind: This formula DOES NOT INCLUDE taxes, and other fees like registration and doc fees, because each state has different rates and I want to make sure everyone can use this same formula no matter where you live.

This formula also assumes a 36 month lease with mileage allowance of 12K miles/year for mainstream cars, and 10K miles per year for luxury vehicles.

(I will show you how to figure out the "true" monthly payment below, and also figure out the formula for higher or lower mileage leases)

Using this formula, you can compare any two lease deals no matter what car you're looking at or how much price difference there is.

Real Lease Deal Example

Let's take a look at a real lease deal from Toyota for the 2024 Camry LE. I took this directly from the manufacturer's web site, and highlighted the important parts needed to calculate whether this is a good lease deal or not.

The main things we need are the following:

1. Term of Lease
2. Annual Miles
3. MSRP
4. Monthly Payment
5. Down Payment
6. Acquisition Fee

In the example above, these figures are:

1. Term of 36 month
2. 12K miles per year
3. MSRP of $26,275
4. Monthly payment of $249
5. Down payment of $3,548
6. Acquisition fee of $695

Step 1. Calculate the "True" Monthly Payment

In order to do a fair comparison, we need to first figure out the "true" monthly payment by rolling the acquisition fee and down payment into it. With most lease deals, the acquisition fee IS NOT included in the down payment figure, but in our example the disclaimer specifically says that the acquisition is included, so we don't need to add that.

In our example above, we take the advertised down payment ($3,548), subtract the first-month's payment (-$249), and since the acquisition fee is already included, that's all we need. The true down payment is $3,299.

Next, we divide the true down payment ($3,299) by the term of the lease (36 months), which calculates out to $91.64. This figure is the "hidden" monthly cost of this lease deal, which we need to add to the advertised monthly payment of $249/month. So, the "true" monthly lease payment is $341 per month ($249 + $91.64)

Step 2. Calculate "Bang for Buck"

Now that we've figured out the true monthly payment, figuring out the "Bang for Buck" is super easy. We simply divide the MSRP by the true monthly payment.

Our example lease deal has a "Bang for Buck" of 77 ($26,275 / $341). Comparing it to the chart above, this deal falls towards the higher end of what's considered a "Fair" deal. It's better than 50% of lease deals on the market, but it's definitely not up there as far as being one of the best deals.

The very best lease deals can go as high as $100 "Bang for Buck", but these are typically low-demand vehicles or high priced electric vehicles that generally don't sell well. In today's leasing market, you should aim for 79 or higher.

What About Leases with More or Less Annual Mileage?

Most lease deals include 12,000 miles per year on mainstream vehicles and 10,000 miles for most luxury models, but if you want to calculate with more or less miles, you need to add or subtract 5 cents per mile difference on mainstream cars, and 12 cents per mile on luxury vehicles.

So, if you're looking at a typical mainstream car like a Honda or Toyota, and the lease deal only comes with 10,000 miles instead of 12,000 per year, you would need to account for this in the "true" monthly payment. This deal would come with 6,000 less miles over a typical 36 month lease. At 5 cents per mile, that's $300 that needs to be added to the true "down payment". After dividing by the term (36), this will add $8.33 to the "true" monthly payment. It's not that big of a difference and shouldn't change the "Bang for Buck" that much, but it's good to get an apples to apples comparison

Lease Calculator

I get a lot of people asking me to review their lease deal or check to make sure they're getting the formula right. Unfortunately, I'm finding I don't have the time to answer each one, so I created this simple calculator. Just enter the MSRP, monthly payment, down payment (if any), and acquisition fee to come up with the lease score. Make sure taxes and other dealer fees such as doc fee, registration, etc ARE NOT INCLUDED!

Assumes 36 month, 12,000 miles annual lease terms

Final Thoughts

As you can see, calculating the "Bang for Buck" can be a quick and easy way to see if your lease is a good deal or not. As long as it's over 78, you're looking at a pretty decent lease deal.

In the past, it was usually easy to beat most advertised Lease Deals when you start shopping around. Unfortunately in today's market, it can be difficult to match these lease deals. I recommend you get quotes from TrueCar to quickly see what kind of lease deals you can get locally.

I also update a list of the best "Bang for Buck" lease deals each month. Be sure to check that out to get a good idea of what kind of lease deals you should be aiming for.