Car Lease Payment Calculator
Estimate your monthly car lease costs including depreciation, rent charges, and taxes.
Estimated Monthly Payment (Total):
$0.00
Monthly Depreciation Charge:
$0.00
Monthly Rent Charge (Interest):
$0.00
Monthly Sales Tax:
$0.00
Total Lease Cost (Term):
$0.00
How Car Lease Payments Are Calculated
Unlike a traditional car loan where you pay for the entire value of the vehicle, a lease only charges you for the portion of the car's value that you use during the lease term. This is known as Depreciation.
A lease payment consists of three primary components:
- Depreciation Fee: The difference between the Adjusted Capitalized Cost (price after down payments) and the Residual Value (what the car is worth at the end of the lease), divided by the number of months.
- Rent Charge: This is essentially the interest. It is calculated using the Money Factor. Formula: (Adjusted Cap Cost + Residual Value) × Money Factor.
- Taxes: Most states apply sales tax to the monthly payment rather than the full value of the car.
What is the Money Factor?
The Money Factor represents the interest rate on your lease. To convert a Money Factor to a standard APR, multiply it by 2400. For example, a money factor of 0.00125 is equivalent to a 3% APR (0.00125 x 2400 = 3).
Example Calculation:
MSRP: $40,000 | Down Payment: $4,000 | Term: 36 Months | Residual: 60% ($24,000)
• Adjusted Cap Cost: $36,000
• Monthly Depreciation: ($36,000 – $24,000) / 36 = $333.33
• Monthly Rent (MF 0.0015): ($36,000 + $24,000) * 0.0015 = $90.00
• Base Monthly Payment: $423.33 + Taxes
MSRP: $40,000 | Down Payment: $4,000 | Term: 36 Months | Residual: 60% ($24,000)
• Adjusted Cap Cost: $36,000
• Monthly Depreciation: ($36,000 – $24,000) / 36 = $333.33
• Monthly Rent (MF 0.0015): ($36,000 + $24,000) * 0.0015 = $90.00
• Base Monthly Payment: $423.33 + Taxes
Key Leasing Terms to Know
Gross Capitalized Cost: The agreed-upon price of the vehicle plus any additional fees or service contracts.
Residual Value: The estimated value of the vehicle at the end of the lease term. A higher residual value usually results in a lower monthly payment.
Capitalized Cost Reduction: Any down payment, trade-in credit, or rebates that lower the amount being financed.