Lease Calculator
Calculate monthly car lease payments from vehicle price, residual value, money factor, and fees.
Vehicle Details
Lease Terms
Fees
Monthly Lease Payment
Including taxes
Monthly Depreciation
Principal portion
Monthly Interest
Rent charge
Monthly Sales Tax
Tax on payment
Total Depreciation
Value loss over lease
Total of Payments
All payments + upfront costs
Total Lease Cost
Including disposition fee
Money Factor
Equivalent to 0.0% APR
How it works
A lease payment has two parts: depreciation (the value the item loses while you use it, spread over the term) plus a finance charge on the money tied up. You're paying for the use, not the whole asset, which is why lease payments are lower than loan payments.
Lease payment
Payment ≈ (Cap cost − Residual) ÷ term + (Cap cost + Residual) · money factor
- Cap cost
- negotiated price of the item
- Residual
- its value at lease-end
- money factor
- the lease's interest rate ÷ 2400
Worked example
- Cap cost = $30,000, residual = $18,000
- 36-month term, money factor 0.00125 (≈3% APR)
- Depreciation = (30,000 − 18,000) ÷ 36 = $333
- Finance = (30,000 + 18,000) × 0.00125 = $60
Payment ≈ $393/month (before tax).
Good to know
- A higher residual value means less depreciation to pay for, so it lowers the payment.
- Multiply the money factor by 2400 to read it as an approximate APR.
- You own nothing at lease-end — weigh that against the lower payment versus buying.
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Frequently Asked Questions
How is a monthly car lease payment calculated?
It's depreciation plus finance charge plus tax. Depreciation = (capitalized cost − residual value) ÷ months; finance charge = (capitalized cost + residual value) × money factor. You pay for the value the car loses during the lease, not the whole car.
What is residual value?
Residual value is the leasing company's prediction of the car's worth at lease end, set as a percentage of MSRP (often 50-60% after 36 months). A higher residual means less depreciation to pay for — which is why vehicles that hold value lease cheaply.
What is the money factor?
The money factor is the lease's interest rate in disguise: multiply it by 2,400 to get the equivalent APR. A money factor of 0.0025 is about a 6% APR. It's negotiable and worth comparing against current auto loan rates.
What happens if I drive more than the mileage allowance?
Leases include an annual mileage cap (commonly 10,000-15,000 miles); exceeding it triggers a per-mile charge at turn-in, typically $0.15-0.30 per mile. If you know you'll drive more, buying extra miles upfront is usually cheaper than paying overage fees later.
Should I lease or buy?
Leasing means lower monthly payments, a new car every few years, and warranty coverage — but you never build equity and payments continue indefinitely. Buying costs more monthly but ends, and the car's remaining value is yours. High-mileage drivers and long-term keepers usually come out ahead buying.