Car Lease Payment Calculator
Estimated Monthly Payment
$0.00
How to Use the Car Lease Calculator
Calculating a car lease is more complex than a standard auto loan. While a loan pays off the entire value of the vehicle, a lease only pays for the depreciation that occurs during your time with the car. This calculator uses the industry-standard formula to help you estimate your monthly commitment before you step onto the dealership lot.
Understanding the Key Lease Components
- MSRP: The Manufacturer's Suggested Retail Price. This is used specifically to calculate the residual value.
- Negotiated Sale Price: Also known as the "Gross Capitalized Cost." You should always negotiate the price of the car just as if you were buying it.
- Residual Value: The estimated value of the car at the end of the lease. For example, if a $30,000 car has a 60% residual after 3 years, it is expected to be worth $18,000.
- Money Factor: This is the lease version of an interest rate. In our calculator, you enter the APR, which we convert to a money factor by dividing by 2400.
The Math Behind Your Lease Payment
The monthly lease payment consists of three main parts: Depreciation, Rent Charge (Interest), and Taxes.
1. Monthly Depreciation: (Adjusted Cap Cost – Residual Value) / Term in Months.
2. Monthly Rent Charge: (Adjusted Cap Cost + Residual Value) × Money Factor.
3. Monthly Tax: (Depreciation + Rent Charge) × Tax Rate.
Example Calculation
Imagine a car with an MSRP of $40,000. You negotiate the price down to $38,000 and put $2,000 down. Your "Adjusted Cap Cost" is $36,000. If the residual is 60% ($24,000) for a 36-month lease and the APR is 4.8%:
- Depreciation: ($36,000 – $24,000) / 36 = $333.33
- Rent Charge: ($36,000 + $24,000) × (4.8 / 2400) = $120.00
- Base Payment: $333.33 + $120.00 = $453.33