Manufacturer's Suggested Retail Price of the Rivian model.
The duration of the lease agreement in months.
The maximum number of miles you can drive per year without penalty.
The estimated value of the vehicle at the end of the lease, as a percentage of MSRP.
A factor representing the cost of financing. Multiply by 2400 to approximate the APR.
Any upfront payments that reduce the amount being financed (e.g., first month's payment, down payment, rebates).
Your Estimated Monthly Lease Payment:
Understanding Your Rivian Lease Payment
Leasing a Rivian electric vehicle offers a way to drive one of these innovative vehicles with potentially lower upfront costs and monthly payments compared to purchasing. However, understanding how your lease payment is calculated is crucial for making an informed decision. This calculator helps demystify the process by breaking down the key components that determine your monthly lease cost.
Key Lease Calculation Components:
Vehicle MSRP: This is the Manufacturer's Suggested Retail Price. It forms the basis for many other calculations, including the residual value.
Lease Term (Months): The duration of your lease agreement. Longer terms generally mean lower monthly payments but result in paying more over the total period.
Annual Mileage Allowance: This dictates how many miles you can drive each year. Exceeding this limit will result in per-mile charges at the end of the lease. Be realistic about your driving habits.
Residual Value Percentage: At the end of the lease, the vehicle has an estimated value, known as the residual value. This is usually expressed as a percentage of the original MSRP. A higher residual value generally leads to lower monthly payments because less of the vehicle's value is being "used up" during the lease. Rivian, like other manufacturers, sets these residual values based on market predictions.
Money Factor: This is essentially the interest rate for your lease. It's a small decimal number. To get an approximate Annual Percentage Rate (APR), you can multiply the money factor by 2400. For example, a money factor of 0.00150 is equivalent to roughly a 3.6% APR (0.00150 * 2400 = 3.6%).
Capitalized Cost Reduction (Cap Cost Reduction): This is any payment made upfront that reduces the amount you are effectively financing. This can include a down payment, any lease rebates offered by Rivian, and sometimes the first month's payment if paid upfront. Reducing the capitalized cost directly lowers your monthly payment.
How the Monthly Payment is Calculated:
The estimated monthly lease payment is calculated using the following formula:
1. Depreciation Amount: This is the portion of the vehicle's value that you will pay for during the lease term.
Depreciation Amount = (Vehicle MSRP – Residual Value)
Where: Residual Value = Vehicle MSRP * (Residual Value Percentage / 100)
2. Monthly Depreciation Cost: This is the total depreciation spread over the lease term.
Monthly Depreciation Cost = Depreciation Amount / Lease Term (Months)
3. Finance Charge (Rent Charge): This is the cost of borrowing the money tied up in the vehicle's value during the lease.
Finance Charge = (Vehicle MSRP + Residual Value) * Money Factor
*Note: This is a simplified calculation. A more precise method involves calculating the finance charge on the average balance.*
4. Adjusted Capitalized Cost: This is the starting point for depreciation and finance charges, after reductions.
Adjusted Capitalized Cost = Vehicle MSRP – Capitalized Cost Reduction
5. Estimated Monthly Lease Payment (Excluding Taxes and Fees): Monthly Payment = (Adjusted Capitalized Cost – Residual Value) / Lease Term (Months) + Finance Charge
A more common and direct formula derived from the above principles:
Monthly Payment = [(Adjusted Cap Cost – Residual Value) / Lease Term] + [(Adjusted Cap Cost + Residual Value) * Money Factor]
Important Considerations:
This calculator provides an *estimate*. Actual lease payments will include taxes, dealer fees, registration fees, and potential acquisition fees, which can vary significantly by location and dealer.
Always negotiate the capitalized cost (the price you pay for the car, often referred to as the "selling price" in a lease context) just like you would negotiate the price of a car you are buying.
Understand any mileage overage charges, wear and tear policies, and early termination penalties.
Sales tax is typically applied to the monthly payment in most states, further increasing the total amount due each month.
By using this calculator and understanding these components, you can better compare lease offers and find a Rivian lease that fits your budget and needs.
function calculateLeasePayment() {
var msrp = parseFloat(document.getElementById("vehicleMSRP").value);
var leaseTerm = parseInt(document.getElementById("leaseTermMonths").value);
var annualMileage = parseInt(document.getElementById("annualMileage").value);
var residualPercentage = parseFloat(document.getElementById("residualValuePercentage").value);
var moneyFactor = parseFloat(document.getElementById("moneyFactor").value);
var capCostReduction = parseFloat(document.getElementById("capitalizedCostReduction").value);
var resultDiv = document.getElementById("result");
var monthlyPaymentSpan = document.getElementById("monthlyPayment");
// Input validation
if (isNaN(msrp) || msrp <= 0 ||
isNaN(leaseTerm) || leaseTerm <= 0 ||
isNaN(annualMileage) || annualMileage <= 0 ||
isNaN(residualPercentage) || residualPercentage 100 ||
isNaN(moneyFactor) || moneyFactor < 0 ||
isNaN(capCostReduction) || capCostReduction < 0) {
alert("Please enter valid positive numbers for all fields. Ensure Residual Value Percentage is between 0 and 100.");
resultDiv.style.display = 'none';
return;
}
// 1. Calculate Residual Value
var residualValue = msrp * (residualPercentage / 100);
// 2. Calculate Adjusted Capitalized Cost
var adjustedCapCost = msrp – capCostReduction;
// Ensure Adjusted Cap Cost is not less than Residual Value for calculation logic
if (adjustedCapCost < residualValue) {
alert("Adjusted Capitalized Cost cannot be less than the Residual Value. Please check your inputs.");
resultDiv.style.display = 'none';
return;
}
// 3. Calculate Monthly Depreciation Cost
var monthlyDepreciation = (adjustedCapCost – residualValue) / leaseTerm;
// 4. Calculate Monthly Finance Charge (Rent Charge)
// Simplified formula: (Adjusted Cap Cost + Residual Value) * Money Factor
// A more common and arguably accurate simplified method often used is based on average balance.
// Let's use a widely accepted simplified formula for lease payments:
// Payment = Depreciation Portion + Finance Charge Portion
// Depreciation Portion = (Adjusted Cap Cost – Residual Value) / Lease Term
// Finance Charge Portion = (Adjusted Cap Cost + Residual Value) * Money Factor
// A slightly different, common method:
// Monthly Payment = Depreciation + Finance Charge
// Depreciation = (MSRP – Residual Value – Cap Cost Reduction) / Lease Term
// Finance Charge = (MSRP – Cap Cost Reduction + Residual Value) * Money Factor
// Let's stick to the most common structure:
var financeCharge = (adjustedCapCost + residualValue) * moneyFactor;
// 5. Calculate Total Estimated Monthly Payment
var estimatedMonthlyPayment = monthlyDepreciation + financeCharge;
// Format the result
monthlyPaymentSpan.textContent = "$" + estimatedMonthlyPayment.toFixed(2);
resultDiv.style.display = 'block';
}