How to Calculate Daily Interest Rate from Annual Rate

Professional Car Lease Calculator

Calculate your monthly lease payment including depreciation and finance fees.

Estimated Monthly Payment $0.00

Monthly Depreciation: $0.00

Monthly Finance Fee: $0.00

Monthly Sales Tax: $0.00

Residual Value at End of Lease: $0.00

How Your Car Lease Payment is Calculated

Lease payments are more complex than standard loan payments because they are based on the depreciation of the vehicle rather than the full purchase price. Here is the breakdown of the three components that make up your monthly payment:

1. Depreciation Fee

This is the largest part of your payment. It covers the difference between what the car is worth now (Adjusted Capitalized Cost) and what it will be worth at the end of your lease (Residual Value). The formula is:

(Adjusted Cap Cost – Residual Value) / Lease Term

2. Finance Fee (Rent Charge)

Instead of an interest rate, leasing uses a Money Factor. To find the finance fee, the lender adds the Adjusted Cap Cost to the Residual Value and multiplies it by the Money Factor:

(Adjusted Cap Cost + Residual Value) * Money Factor

3. Sales Tax

In most states, you only pay sales tax on the monthly lease payment, not the full value of the vehicle. Our calculator applies the tax percentage to the sum of the depreciation and finance fees.

Realistic Example

Imagine you are leasing a SUV with an MSRP of $45,000. You negotiate the price down to $42,000 and put $2,000 down. The residual value is 60% after 36 months, and your money factor is 0.0015 (equivalent to 3.6% APR).

• Adjusted Cap Cost: $40,000 ($42,000 – $2,000)
• Residual Value: $27,000 ($45,000 * 60%)
• Monthly Depreciation: ($40,000 – $27,000) / 36 = $361.11
• Monthly Finance Fee: ($40,000 + $27,000) * 0.0015 = $100.50
• Subtotal: $461.61

After adding sales tax, your total monthly payment would be roughly $498.54 (assuming 8% tax).