Auto Lease Payment Calculator
Estimate your monthly car lease payments including taxes and interest.
Gross Capitalized Cost:
Residual Value Amount:
Monthly Depreciation:
Monthly Rent Charge:
Total Monthly Payment (Inc. Tax):
Understanding Your Car Lease Calculation
Leasing a vehicle is different from traditional financing. Instead of paying for the entire value of the car, you are essentially paying for the depreciation that occurs during the time you drive it, plus interest and taxes.
Key Terms Used in This Calculator
- Gross Capitalized Cost: The total price of the vehicle including the negotiated price and any added fees or service contracts.
- Residual Value: The estimated value of the car at the end of the lease term. This is set by the leasing company. A higher residual value usually means a lower monthly payment.
- Money Factor: This is the interest rate on a lease. To convert APR to Money Factor, divide the APR by 2400. In our calculator, we use the APR for easier input.
- Cap Cost Reduction: The sum of your down payment and trade-in value that reduces the amount being financed.
Example Calculation
If you lease a car with an MSRP of $40,000 for 36 months, with a residual value of 60% ($24,000), you are responsible for $16,000 of depreciation. Dividing $16,000 by 36 months gives you a base depreciation charge of approximately $444 per month. The rent charge (interest) and taxes are then added to this base amount.
How to Lower Your Lease Payment
To get the best lease deal, focus on three main areas: negotiating a lower selling price (the Cap Cost), finding vehicles with high residual values, and qualifying for the lowest possible money factor through a good credit score. Avoid putting too much money down on a lease, as that money is lost if the vehicle is totaled or stolen early in the contract.