Lease Value Ratio Defined
The Lease Value Ratio (LVR) is the heart, soul, passion and entire purpose of MonthlyCarLease.com. We wanted to make it easy to evaluate car leases. The LVR is displayed as a single number percentage, or ratio, which quickly tells you how much car you are getting for your average payment. The lower the LVR, the better the car lease deal.
How To Calculate Your Lease Value Ratio
LVR is calculated as follows:
Average Car Payment / MSRP
The resulting numerical percentage is usually between 1 and 1.5 percent; however there are exceptions on both sides of the rule. I’ve seen some really amazing car leases where the lease value ratio os below 1.00% and some really lousy car leases where the Lease Value Ration tops 1.50%. So, how do you know by the number a good lease from a bad one? Based on the monthly car lease figures and data we’ve accumulated over the past two years, here is a guide to help you quickly decide.
LVR Lease Value Ratio Guidelines
- Excellent Lease: 1.10% and Below
- Good Lease: 1.11% – 1.20%
- Average Lease: 1.21% – 1.36%
- Poor Lease: 1.36% and Up
Remember, the lease value ratio is only a number. Each of us lease cars for slightly different personal reasons. There may be certain models of cars that simply don’t look like a good lease on paper, but when you compare them to other cars in their class, perhaps they fair very well.
|Down Payment Doesn’t Include First Month’s Payment|
|Average Car Payment||$305.56||Total Cost / Lease Term|
|Total Cost of Lease||$11,000.00||(Monthly Payment x Lease Term) + Down Payment|
|Lease Value Ratio – LVR||1.22%||Average Car Payment / MSRP|
The LVR should be used only as a rule of thumb to give you a quick snapshot of whether or not you’re getting a reasonable good car lease payment or not. Below, is a formula that you can paste into your spreadsheet for helping you determine your own Lease Value Ratio.