Car Lease Payment Calculator
Estimate your monthly car lease payments based on MSRP, money factor, and residual value.
Gross Capitalized Cost:
$0.00
Residual Value:
$0.00
Monthly Depreciation:
$0.00
Monthly Rent Charge:
$0.00
Total Monthly Payment:
$0.00
How Car Lease Payments are Calculated
Leasing a car is essentially paying for the vehicle's depreciation during the time you drive it, plus interest and taxes. Unlike a traditional auto loan, you aren't paying for the entire value of the car—only the portion you "use."
Understanding the Key Terms
- Gross Capitalized Cost: This is the negotiated price of the vehicle plus any additional fees or taxes rolled into the lease.
- Residual Value: This is the estimated value of the car at the end of the lease term. It is usually expressed as a percentage of the original MSRP.
- Money Factor: This represents the interest rate on a lease. To get the equivalent APR, multiply the money factor by 2,400. For example, 0.00125 x 2400 = 3% APR.
- Depreciation Fee: Calculated as (Adjusted Cap Cost – Residual Value) / Lease Term.
Example Calculation
Imagine you lease a car with an MSRP of $40,000. You negotiate the price down to $38,000. You put $3,000 down, leaving a Net Cap Cost of $35,000. If the 36-month residual value is 60% ($24,000), your total depreciation is $11,000. Over 36 months, that's $305.56 per month in depreciation.
If the money factor is 0.0015, your monthly rent charge is ($35,000 + $24,000) * 0.0015 = $88.50. Adding these together with a 7% tax brings your total payment to approximately $421.74.
Tips for a Better Lease Deal
To lower your monthly payment, focus on three things: negotiating a lower sales price, finding vehicles with high residual values, and qualifying for a lower money factor through a good credit score. Avoid putting too much money down on a lease, as that capital is lost if the vehicle is totaled or stolen early in the term.