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Auto Lease Calculator Guide
A lease payment is built from two parts: depreciation (the value the car loses while you drive it) and a finance charge. This calculator estimates your monthly lease payment from the price, residual value, money factor, and term.
Depreciation = (net cap cost − residual) ÷ term. Finance fee = (net cap cost + residual) × money factor. Monthly payment = depreciation + finance fee, plus tax.
How Is a Lease Payment Calculated?
Subtract any down payment from the price to get the net capitalized cost. The car depreciates from that down to its residual value over the term — that's the depreciation fee. The finance fee (rent charge) is based on the money factor. Add them, then add sales tax.
Lease Terms Explained
| Term | What It Means |
|---|---|
| Cap cost | The price you're leasing the car at |
| Residual value | The car's set value at lease end (as % of MSRP) |
| Money factor | The lease's interest; × 2400 ≈ the APR |
| Depreciation fee | Value lost over the lease, spread monthly |
Worked Example
A $35,000 car, $2,000 down, 57% residual, money factor 0.0025, over 36 months: net cap = $33,000; residual = $19,950; depreciation = (33,000 − 19,950) ÷ 36 = $362.50; finance = (33,000 + 19,950) × 0.0025 = $132.38; base = $494.88, plus 7% tax ≈ $530/month. The money factor of 0.0025 is about a 6% APR.
Tips
- Negotiate the cap cost just like a purchase price — it directly lowers depreciation.
- A higher residual lowers your payment, since the car depreciates less on paper.
- Convert the money factor to APR (× 2400) to compare it to loan rates.
- Money down on a lease is often not recommended — you can lose it if the car is totaled early.
Compare with buying using the Car Payment Calculator, and budget fuel with the Fuel Cost Calculator.
Estimates for planning only; actual lease terms, taxes, and fees vary.
Frequently Asked Questions
How is a lease payment calculated?
Add the monthly depreciation (cap cost minus residual, divided by term) to the finance fee (cap cost plus residual, times the money factor), then add tax.
What is a money factor?
It's the lease equivalent of an interest rate; multiply it by 2400 to get the approximate APR.
What is residual value?
The vehicle's predetermined value at the end of the lease, usually expressed as a percentage of MSRP — a higher residual means a lower payment.
Should I put money down on a lease?
Often not — a large down payment can be lost if the car is stolen or totaled, and it doesn't lower the total cost much.
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