Professional Car Lease Calculator
Calculate your precise monthly lease payments, depreciation, and rent charges.
How Car Lease Payments are Calculated
Unlike a traditional auto loan, a car lease is based on the difference between the car's current price and its predicted value at the end of the term. This is known as Depreciation. To use this calculator effectively, you should understand the three primary components:
1. The Capitalized Cost (Cap Cost)
This is the "selling price" of the vehicle. To lower your monthly payment, you should negotiate the Cap Cost just as you would if you were buying the car. Subtracting your down payment and trade-in value from this number gives you the Adjusted Capitalized Cost.
2. Residual Value
The residual value is what the leasing company estimates the car will be worth when your lease ends. It is usually expressed as a percentage of the MSRP. A higher residual value means you pay for less depreciation, resulting in a lower monthly payment.
3. The Money Factor
The money factor is essentially the interest rate on a lease. It is expressed as a small decimal (e.g., 0.00125). To convert the money factor to a standard APR, multiply it by 2400. Conversely, if you only have the APR, divide it by 2400 to get the money factor for this calculator.
Example Calculation
If you lease a car with an MSRP of $30,000 and a negotiated price of $28,000, with a 36-month term and a 60% residual value ($18,000):
- Depreciation: ($28,000 – $18,000) / 36 = $277.78 per month.
- Rent Charge: ($28,000 + $18,000) * Money Factor.
- Tax: Applied to the sum of depreciation and rent charge in most states.