Average Car PaymentAverage Car Payment is not a term you'll hear about from car dealers, financial managers, banks sales reps and financing experts. And except for here on MonthlyCarLease, you are not likely to find average car payment listed among any of the jargon and terms inside online car leasing guides. Yet ironically, average car payment is the single most important consideration in leasing a car. The average car payment goes beyond the actual car payments which are advertised by car makers, dealers and in newspaper advertisements. Understanding what average car payment means, gives you a much better sense of what you are paying to lease or buy a car.  So, what is average car payment and how do you calculate yours?

How Do You Calculate Your Average Car Payment?

Your average car payment is based on very simple math. It tells us how much our monthly payment would average out to be when we consider the down payments and/or any extra fees required to lease the car. To calculate our average car payment, we will need to know the total cost of our lease. The total cost of our lease is determined by adding any down payments and additional fees to the total cost of our monthly lease payments.

Total Lease Cost =

  • ((Monthly Payments x Lease Months)+(Down Payment + Extra Fees))

The average car payment is the total cost divided by the number of months in the lease term.

Average Car Payment =

  • (Total Cost Of Lease / Lease Months)

So, can you see why the average payment is such an important figure? If I leased a 2011 Honda Accord EX for $300 a month on a 36 month lease, but had to put $2,000 down to do it, my average monthly cost is $355.55. ($300 x 36) + $2,000) / 36) That's $55.00 a month higher than the advertised payment of $300. While Down payments or capitalized cost reductions do lower our monthly payment, they generally don't reduce our total cost of leasing the vehicle. Those down payments underneath the fine print of lease deals are subtle, but effective marketing ploys to make us feel as though our monthly cost is lower than it really is. Whether we are buying or leasing cars, it is important not to be influenced by the marketing psychology behind low monthly car payments. Some car manufacturers like Honda have recognized that some consumers don't like the idea of paying money up front on a car lease and they have adjusted their car lease specials accordingly. Look for No-Money-Down-Car-Lease-Specials.

Can You Negotiate Your Average Car Payment?

Negotiating your average car payment is as simple as refusing to pay any down payments, cap cost reductions or extra fees. Bring your calculator, do the simple math and know your average car payment.

Know Your Average Car Payment