Car Lease Calculator

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car lease calculator
Calculate Monthly Payment
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function calculateLease(){var p=parseFloat(document.getElementById('price').value);var d=parseFloat(document.getElementById('down').value);var tr=parseFloat(document.getElementById('trade').value);var term=parseFloat(document.getElementById('term').value);var apr=parseFloat(document.getElementById('apr').value);var res=parseFloat(document.getElementById('residual').value);var tax=parseFloat(document.getElementById('tax').value);var showSteps=document.getElementById('steps').checked;if(isNaN(p)||isNaN(d)||isNaN(tr)||isNaN(term)||isNaN(apr)||isNaN(res)||isNaN(tax)){alert('Please enter valid numerical values');return;}var capCost = p – d – tr;var moneyFactor = apr / 2400;var depreciation = (capCost – res) / term;var rentCharge = (capCost + res) * moneyFactor;var basePayment = depreciation + rentCharge;var taxAmount = basePayment * (tax / 100);var totalPayment = basePayment + taxAmount;document.getElementById('finalResult').innerHTML = 'Estimated Monthly Payment: $' + totalPayment.toFixed(2);var stepsHTML = ";if(showSteps){stepsHTML += 'Detailed Breakdown:
';stepsHTML += '1. Adjusted Capitalized Cost: $' + capCost.toFixed(2) + ' (' + p + ' – ' + d + ' – ' + tr + ')
';stepsHTML += '2. Monthly Depreciation: $' + depreciation.toFixed(2) + ' ((' + capCost.toFixed(2) + ' – ' + res.toFixed(2) + ') / ' + term + ')
';stepsHTML += '3. Money Factor: ' + moneyFactor.toFixed(5) + ' (' + apr + ' / 2400)
';stepsHTML += '4. Monthly Rent Charge: $' + rentCharge.toFixed(2) + ' ((' + capCost.toFixed(2) + ' + ' + res.toFixed(2) + ') × ' + moneyFactor.toFixed(5) + ')
';stepsHTML += '5. Base Monthly Payment: $' + basePayment.toFixed(2) + ' (' + depreciation.toFixed(2) + ' + ' + rentCharge.toFixed(2) + ')
';stepsHTML += '6. Monthly Tax: $' + taxAmount.toFixed(2) + ' (' + basePayment.toFixed(2) + ' × ' + tax + '%)
';stepsHTML += 'Total Payment: $' + totalPayment.toFixed(2) + '';}document.getElementById('stepDetails').innerHTML = stepsHTML;document.getElementById('calculatorAnswer').style.display='block';}

Calculator Use

The car lease calculator is a professional-grade tool designed to help you estimate your monthly lease payments with precision. Unlike simple loan calculators, leasing involves unique variables such as residual values and money factors. This tool allows you to input the vehicle's price, your down payment, trade-in equity, and lease terms to see a full breakdown of what you will owe each month.

By using this calculator, you can compare different lease offers from dealerships and ensure the numbers align with the manufacturer's advertised specials. You can also adjust the variables to see how a higher down payment or a different interest rate impacts your monthly cash flow.

Vehicle Price ($)
The negotiated sale price of the car (also known as the Gross Capitalized Cost).
Down Payment & Trade-in
The amount of cash or vehicle equity applied upfront to reduce the capitalized cost.
Residual Value
The estimated value of the vehicle at the end of the lease term, usually set by the bank.

How It Works

When you lease a car, you aren't paying for the whole vehicle. Instead, you are paying for the depreciation (the difference between the price now and the value later) plus interest (the rent charge). The car lease calculator uses the standard industry formula:

Monthly Payment = Depreciation Fee + Rent Charge + Tax

  • Depreciation Fee: (Adjusted Cap Cost – Residual Value) / Lease Term. This covers the car's loss in value.
  • Rent Charge: (Adjusted Cap Cost + Residual Value) × Money Factor. This is effectively the interest on the lease.
  • Money Factor: This is the interest rate expressed as a decimal. You can find this by dividing the APR by 2400.
  • Sales Tax: Most states apply sales tax to the monthly payment, though some tax the full capitalized cost upfront.

Calculation Example

Example: Let's say you are leasing a SUV with a price of $40,000. You have a $4,000 down payment, a 36-month term, an APR of 4.8%, and a residual value of $22,000. The sales tax is 8%.

Step-by-step solution:

  1. Adjusted Cap Cost = $40,000 – $4,000 = $36,000
  2. Monthly Depreciation = ($36,000 – $22,000) / 36 = $388.89
  3. Money Factor = 4.8 / 2400 = 0.002
  4. Rent Charge = ($36,000 + $22,000) × 0.002 = $116.00
  5. Base Payment = $388.89 + $116.00 = $504.89
  6. Tax = $504.89 × 0.08 = $40.39
  7. Total Monthly Payment = $545.28

Common Questions

What is a good Money Factor?

A "good" money factor depends on the current market rates. To convert it to a standard APR, multiply the money factor by 2400. For instance, a money factor of 0.0015 is equivalent to 3.6% APR. Always aim for a money factor that reflects your credit score.

Should I put money down on a lease?

Most financial experts suggest putting as little down as possible (often called "Sign and Drive"). Since you don't own the car, if the vehicle is totaled in an accident shortly after the lease starts, your down payment is typically lost, as insurance only pays the market value of the car to the leasing company.

Can I negotiate the residual value?

No, residual values are generally set by the financial institution (the "lessor") and are not negotiable. Dealerships use these fixed percentages to ensure they aren't losing money at the end of the term. To get a lower payment, you must negotiate the selling price (Cap Cost) or find a better interest rate.

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