function calculateLease() {
var msrp = parseFloat(document.getElementById('msrp').value) || 0;
var salesPrice = parseFloat(document.getElementById('salesPrice').value) || 0;
var downPayment = parseFloat(document.getElementById('downPayment').value) || 0;
var tradeIn = parseFloat(document.getElementById('tradeIn').value) || 0;
var residualPerc = parseFloat(document.getElementById('residualPerc').value) || 0;
var term = parseFloat(document.getElementById('leaseTerm').value) || 1;
var mf = parseFloat(document.getElementById('moneyFactor').value) || 0;
var taxRate = parseFloat(document.getElementById('salesTax').value) || 0;
// If user enters APR instead of MF (e.g. 3 instead of 0.00125)
if (mf > 0.5) {
mf = mf / 2400;
}
// 1. Gross Cap Cost is the sales price
// 2. Net Cap Cost (Adjusted Cap Cost)
var adjCapCost = salesPrice – downPayment – tradeIn;
// 3. Residual Value
var residualVal = msrp * (residualPerc / 100);
// 4. Depreciation Fee
var depreciation = (adjCapCost – residualVal) / term;
if (depreciation < 0) depreciation = 0;
// 5. Rent Charge (Finance Fee)
var rentCharge = (adjCapCost + residualVal) * mf;
// 6. Base Payment
var basePayment = depreciation + rentCharge;
// 7. Tax
var monthlyTax = basePayment * (taxRate / 100);
// 8. Total
var totalMonthly = basePayment + monthlyTax;
// Display Results
document.getElementById('monthly-total').innerText = '$' + totalMonthly.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res-depreciation').innerText = '$' + depreciation.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res-rent').innerText = '$' + rentCharge.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res-base').innerText = '$' + basePayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res-tax').innerText = '$' + monthlyTax.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res-residual-val').innerText = '$' + residualVal.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('lease-results').style.display = 'block';
}
Understanding How Car Lease Payments Are Calculated
Leasing a vehicle can be more complex than a traditional auto loan because you aren't paying for the entire car. Instead, you are paying for the depreciation of the vehicle over a specific period, plus interest and taxes. This calculator helps you break down the three primary components of a lease payment.
1. The Depreciation Fee
This is the most significant part of your payment. It represents the loss in the car's value during your lease term. It is calculated by taking the Adjusted Capitalized Cost (the negotiated price minus down payments) and subtracting the Residual Value (what the car is worth at the end of the lease), then dividing that number by the number of months in the lease.
2. The Rent Charge (Money Factor)
The rent charge is essentially the interest you pay for the leasing company's capital. In the world of leasing, interest is expressed as a Money Factor. To convert a Money Factor to a standard APR, you multiply it by 2,400. For example, a Money Factor of 0.00125 is equal to a 3% APR.
3. Sales Tax
Unlike a purchase where you might pay tax on the full value of the vehicle upfront, most states only require you to pay sales tax on the monthly lease payment. This makes leasing an attractive option in high-tax areas.
Example Calculation
Imagine you want to lease a SUV with an MSRP of $40,000.
Negotiated Price: $38,000
Down Payment: $2,000 (Adjusted Cap Cost becomes $36,000)
Negotiate the Selling Price: Most people don't realize that the "Cap Cost" is negotiable, just like a purchase price.
Check for Rebates: Manufacturers often offer "lease cash" or loyalty rebates that act like a down payment.
Mind the Mileage: Higher mileage allowances (e.g., 15k miles vs 10k miles) lower the residual value, which increases your monthly payment.
Avoid Large Down Payments: In a lease, if the car is totaled or stolen early on, your down payment is often lost. It is generally safer to put $0 down if your credit allows.