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About the car lease calculator
A lease payment looks simple on the dealer's sheet, but it is made of three parts: depreciation, a rent charge and tax. This free car lease calculator works out each part, so you can check the dealer's number and see what really changes your payment.
Type the sticker price (MSRP), the price you agreed (the cap cost), your down payment and trade-in, the residual value, the money factor (or an APR), the lease term and the sales tax. The monthly payment updates as you type, with every part listed below it.
Features
- Monthly lease payment — depreciation + rent charge + sales tax, each shown on its own line
- Money factor or APR — type either one; the calculator shows the other (APR = money factor × 2,400)
- Residual value — as a percent of MSRP, with buttons for common values
- Down payment and trade-in — both lower the amount you finance
- Lease fees — an acquisition fee or other fees added to the lease, under More options
- Totals — all payments, the full cost of the lease, the total rent charge and the buyout price at the end
- Any currency — your numbers are saved only on this device
How a lease payment is worked out
The page opens with this example: MSRP $35,000, agreed price $33,000, $2,000 down, residual 58%, money factor 0.0025 (6% APR), 36 months, sales tax 7%.
- Adjusted cap cost = price + fees − down payment − trade-in = 33,000 − 2,000 = $31,000
- Residual value = MSRP × residual % = 35,000 × 58% = $20,300
- Depreciation = (31,000 − 20,300) ÷ 36 = $297.22 a month
- Rent charge = (31,000 + 20,300) × 0.0025 = $128.25 a month
- Before tax: 297.22 + 128.25 = $425.47; sales tax 7% = $29.78
- Monthly payment = $455.26
The 36 payments add up to about $16,389, or $18,389 with the down payment. Of that, $4,617 is the rent charge. At the end you can give the car back, or buy it for the residual value of $20,300.
Money factor and APR
The money factor is the lease's interest rate written in another way. Multiply it by 2,400 to get an APR you can compare with a car loan:
| Money factor | APR | Payment in the example |
|---|---|---|
| 0.0015 | 3.6% | $400.36 |
| 0.0020 | 4.8% | $427.81 |
| 0.0025 | 6.0% | $455.26 |
| 0.0030 | 7.2% | $482.70 |
| 0.0035 | 8.4% | $510.15 |
Ask the dealer for the money factor and check it. A dealer can add to the bank's base money factor.
Residual value
The residual is what the leasing company thinks the car will be worth at the end. You pay for the value the car loses, so a higher residual means a lower payment. Same example:
| Residual | Monthly payment |
|---|---|
| 50% | $530.99 |
| 55% | $483.65 |
| 58% | $455.26 |
| 60% | $436.32 |
| 65% | $388.99 |
The residual is set by the leasing company for each model and term — you usually cannot change it, but it is a good reason to compare models.
What lowers a lease payment?
- A lower price. The cap cost can be negotiated like a purchase price. $33,000 instead of $35,000 lowers the example payment from $520.05 to $455.26; $31,000 lowers it to $390.46.
- A lower money factor. Good credit usually gets a better one.
- A down payment lowers the payment, but not the total by much: $0 down gives $520.05 a month and about $18,722 in total; $4,000 down gives $390.46 a month and about $18,057 in total. If the car is stolen or wrecked early, money put down is often lost, so many people put little or nothing down.
Frequently asked questions
How is a lease payment calculated?
Monthly payment = depreciation + rent charge + tax. Depreciation = (adjusted cap cost − residual) ÷ months. Rent charge = (adjusted cap cost + residual) × money factor. In most US states the sales tax is charged on each payment.
What is a money factor?
It is the interest rate of a lease, written as a small number like 0.0025. Money factor × 2,400 = APR, so 0.0025 is about 6%. Choose APR in % if the dealer gives you a percent.
What is a good residual value?
A higher residual is better for a lease, because you pay for less lost value. On 36-month leases, residuals of 50% to 60% are common; cars that keep their value well have higher ones.
Is sales tax included?
Yes, if you type it. The calculator charges it on each monthly payment, as most US states do. Some states tax the whole price at the start, and outside the USA the price usually includes tax — then type 0.
What fees are in a lease?
Often an acquisition fee at the start and a disposition fee when you give the car back, plus registration and documents. Type fees you add to the lease under More options. A disposition fee at the end, and charges for extra miles or wear, are not in the monthly payment.
Should I lease or buy?
A lease has lower payments but you do not own the car at the end. Compare this payment with a loan on the same car in the Auto Loan Calculator.
Related tools
- Auto Loan Calculator — the payment if you buy the car with a loan
- EV Charging Cost Calculator — what an electric car costs to charge
- Fuel Cost Calculator — the fuel cost of a trip
- Loan Calculator — a quick monthly payment for any loan
- 50/30/20 Budget Calculator — fit the payment into your budget
How to use it
- Type the sticker price (MSRP) and the price you agreed with the dealer
- Type your down payment and any trade-in value
- Type the residual value in % of the MSRP, or tap a button
- Choose the lease term, then type the money factor — or switch to APR in %
- Type the sales tax for your area (0 if the price already includes tax)
- Open More options for fees added to the lease
- Read the monthly payment and the parts it is made of
