Calculate Your Lease Payment
Enter the vehicle details and lease terms below. Results update automatically as you type.
Payment Breakdown
| Component | Amount |
|---|
Lease vs. Buy Comparison
Compare the total cost of leasing this vehicle versus financing a purchase over the same period.
Term Comparison
See how different lease terms affect your monthly payment and total cost, using the same vehicle and money factor.
| Term | Monthly (pre-tax) | Monthly (w/ tax) | Total Cost | Depreciation |
|---|
Money Factor ↔ APR Converter
Convert between money factor and APR. Multiply money factor by 2,400 to get approximate APR.
How Car Lease Payments Work
A car lease payment is made up of two main components: the depreciation charge and the finance charge (rent charge).
The Lease Payment Formula
Monthly Payment = Depreciation Fee + Finance Fee + Tax
Step 1: Net Capitalized Cost
The net cap cost is the effective price you are financing:
Net Cap Cost = Negotiated Price + Fees - Down Payment - Trade-In
Step 2: Depreciation Fee
This is the portion of the payment that covers the car's loss in value during the lease:
Depreciation Fee = (Net Cap Cost - Residual Value) / Lease Term
The residual value is a percentage of MSRP that the leasing company estimates the car will be worth at lease end.
Step 3: Finance Fee (Rent Charge)
This is effectively the interest you pay, calculated using the money factor:
Finance Fee = (Net Cap Cost + Residual Value) x Money Factor
Step 4: Sales Tax
Tax treatment varies by state. Most states tax the monthly payment. Some states tax the full vehicle price upfront. This calculator applies tax to the monthly payment, which is the most common method.
Understanding Money Factor
The money factor is a lease-specific way of expressing the interest rate. It is a small decimal number, typically between 0.0005 and 0.005.
Converting Money Factor to APR
APR = Money Factor x 2,400
Common Money Factor Reference
| Money Factor | Equivalent APR | Rating |
|---|---|---|
| 0.00042 | 1.0% | Excellent (promotional) |
| 0.00083 | 2.0% | Excellent |
| 0.00125 | 3.0% | Very Good |
| 0.00167 | 4.0% | Good |
| 0.00208 | 5.0% | Average |
| 0.00250 | 6.0% | Below Average |
| 0.00333 | 8.0% | High |
| 0.00417 | 10.0% | Very High |
The money factor you qualify for depends on your credit score. Higher credit scores get lower money factors.
Typical Residual Values by Term
Residual values vary by vehicle make, model, and lease term. Here are general ranges:
| Lease Term | Typical Residual Range | Notes |
|---|---|---|
| 24 months | 60% -- 72% | Highest residual, lowest depreciation cost |
| 36 months | 50% -- 62% | Most common lease term |
| 39 months | 48% -- 58% | Common with some manufacturers |
| 48 months | 42% -- 52% | Longer term, higher total cost |
Luxury vehicles and trucks tend to have lower residual values. Popular economy cars, certain SUVs, and electric vehicles with strong demand hold value better. Your dealer or leasing company sets the residual value -- it is not negotiable.
Tips for Getting a Better Lease Deal
- Negotiate the selling price (cap cost) -- The negotiated price is the single biggest factor in your monthly payment. Negotiate it just like you would if buying.
- Check the money factor -- Ask the dealer for the money factor and multiply by 2,400. Compare to current auto loan rates. A good money factor should be competitive with bank rates.
- Choose vehicles with high residual values -- Cars that hold their value well have lower depreciation, which means lower lease payments.
- Minimize upfront payments -- Putting less down protects you financially. If the car is totaled or stolen, gap insurance covers the lease balance but you lose your down payment.
- Be realistic about mileage -- Standard leases allow 10,000--12,000 miles per year. Excess mileage charges of $0.15--$0.30 per mile add up fast. It is cheaper to buy extra miles upfront.
- Watch for hidden fees -- Acquisition fees, disposition fees, and documentation fees all add to total cost. Factor them into your comparison.
Frequently Asked Questions
How is a car lease payment calculated?
A lease payment has two parts: the depreciation fee (net cap cost minus residual value, divided by the number of months) and the finance fee (net cap cost plus residual value, multiplied by the money factor). Sales tax is then applied to the monthly total in most states.
What is a money factor?
A money factor is the lease equivalent of an interest rate, expressed as a small decimal like 0.00125. Multiply it by 2,400 to convert it to an approximate APR. A money factor of 0.00125 equals roughly 3.0% APR.
What is residual value?
Residual value is what the leasing company estimates the car will be worth at the end of the lease, expressed as a percentage of MSRP. A 56% residual on a $35,000 car means the car is projected to be worth $19,600 at lease end. Higher residual values mean lower monthly payments.
Should I lease or buy a car?
Leasing makes sense if you want lower monthly payments, enjoy driving a new car every 2--3 years, and stay within mileage limits. Buying makes sense if you keep cars for many years, drive high miles, want to build equity, or prefer no monthly payment once paid off. The cheapest option long-term is usually buying and keeping the car for 8+ years.
Should I put money down on a lease?
Financial experts generally recommend putting as little down as possible on a lease. Unlike buying, a down payment on a lease does not reduce the total interest paid -- it only lowers the monthly payment. More importantly, if the car is totaled, you lose the entire down payment.
What are excess mileage charges?
Most leases charge $0.15 to $0.30 per mile for exceeding the annual mileage allowance (typically 10,000--12,000 miles/year). On a 36-month lease with 3,000 excess miles at $0.25/mile, that is $750 at lease end. You can sometimes negotiate a higher mileage allowance upfront at a lower per-mile rate.
Does this calculator store my data?
No. All calculations run entirely in your browser. No data is sent to any server, and nothing is stored.
Related Tools
- Car Payment Calculator -- calculate monthly auto loan payments
- Auto Loan Calculator -- calculate payments with down payment, trade-in, and interest
- Loan Calculator -- general-purpose loan payment calculator
- Depreciation Calculator -- calculate asset depreciation over time
- Budget Calculator -- plan monthly budget allocations
Privacy & Limitations
Privacy: This calculator runs entirely in your browser. No personal or financial data is transmitted or stored anywhere.
Limitations: This calculator provides estimates based on the standard lease payment formula. Actual lease terms, money factors, and residual values are set by the leasing company and may differ. Tax treatment varies by state -- some states tax the full price upfront rather than the monthly payment. This tool is for educational and estimation purposes and should not be considered financial advice.
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Car Lease Calculator FAQ
How is a car lease payment calculated?
A lease payment has two parts: depreciation and finance charge. Depreciation = (Net Cap Cost - Residual Value) / Lease Term. Finance Charge = (Net Cap Cost + Residual Value) x Money Factor. The monthly payment is the sum of these two plus applicable sales tax.
What is a money factor in a car lease?
A money factor is the lease equivalent of an interest rate, expressed as a small decimal (e.g., 0.00125). To convert a money factor to an approximate APR, multiply by 2,400. So 0.00125 x 2,400 = 3.0% APR.
What is residual value?
Residual value is the estimated value of the car at the end of the lease term, expressed as a percentage of MSRP. A higher residual value means lower depreciation and lower monthly payments. Typical residual values range from 45% to 65% for a 36-month lease.
Is it cheaper to lease or buy a car?
Leasing typically has lower monthly payments than buying, but you don't build equity. Buying costs more per month but you own the car at the end. The better option depends on how long you keep cars, your mileage, and whether you value ownership or lower payments.
What is a good money factor for a lease?
A good money factor is generally below 0.002 (equivalent to about 4.8% APR). Excellent credit scores can qualify for money factors around 0.001 or lower (2.4% APR or less). Some manufacturers offer subsidized money factors as low as 0.00001 as promotional incentives.
Does this calculator store my data?
No. All calculations run entirely in your browser. No data is sent to any server, and nothing is stored.