When you`re in the market for a new car, you have a few options for acquiring it. Some people choose to buy the car outright, paying for it in one lump sum. Others choose to finance it, making monthly payments over a set period of time. But another option that`s become increasingly popular in recent years is leasing.

Leasing a car involves paying a monthly fee to “rent” the car for a set period of time, usually two to three years. At the end of the lease term, you return the car to the dealership and either walk away or sign a new lease on a different vehicle.

One of the key factors in determining the cost of a lease is the MSRP, or Manufacturer`s Suggested Retail Price. This is essentially the sticker price of the car before any negotiations or discounts are applied. The MSRP helps determine the residual value of the car, which is the amount it`s expected to be worth at the end of the lease term.

The MSRP is also used to calculate the monthly lease payment. Generally speaking, the higher the MSRP, the higher the monthly payment will be. However, there are other factors that can come into play, such as the length of the lease term, the amount of money you put down upfront, and the interest rate.

When you lease a car, you`ll sign a lease agreement that outlines the terms of the lease, including the MSRP and the monthly payment. It`s important to carefully read and understand this agreement before signing it, as it will be legally binding for the duration of the lease term.

One thing to keep in mind is that while the MSRP is set by the manufacturer, you may be able to negotiate a lower price with the dealership. This could result in a lower monthly payment, which could save you money over the course of the lease term.

Leasing a car can be a convenient and cost-effective way to get behind the wheel of a new vehicle. Understanding the role that the MSRP plays in the lease agreement can help you make an informed decision when it comes to choosing your next car.