Estimate your monthly lease payments based on MSRP, money factor, and residual value.
Estimated Monthly Payment
$0.00
Understanding How Car Lease Payments Are Calculated
Leasing a car is different from buying because you are essentially paying for the vehicle's depreciation during the time you drive it, plus interest and fees. To get the most accurate estimate, you need to understand the key components of the lease formula.
Key Lease Terms Explained
MSRP: The Manufacturer's Suggested Retail Price. This is the starting point for negotiations.
Gross Capitalized Cost: The negotiated price of the vehicle plus any added fees or taxes.
Residual Value: The estimated value of the car at the end of the lease term. A higher residual value usually results in a lower monthly payment.
Money Factor: This represents the interest rate. To convert the money factor to an APR, multiply it by 2400 (e.g., 0.00125 x 2400 = 3%).
Cap Cost Reduction: This is your down payment and trade-in value, which reduces the total amount you need to finance.
The Math Behind the Lease
The monthly payment is composed of two primary parts: the Depreciation Fee and the Rent Charge (Finance Fee).
1. Monthly Depreciation: (Adjusted Cap Cost – Residual Value) / Lease Term
To get the best deal on a lease, consider negotiating the sales price (the cap cost) just as you would when buying. Additionally, look for vehicles with high residual values and low money factors, often promoted as "lease specials" by manufacturers. Always check if there are hidden acquisition fees or disposition fees that might affect your total cost of ownership.
function calculateCarLease() {
var msrp = parseFloat(document.getElementById('msrp').value);
var downPayment = parseFloat(document.getElementById('downPayment').value) || 0;
var tradeIn = parseFloat(document.getElementById('tradeIn').value) || 0;
var term = parseFloat(document.getElementById('leaseTerm').value);
var residualPercent = parseFloat(document.getElementById('residualPercent').value);
var moneyFactor = parseFloat(document.getElementById('moneyFactor').value);
if (isNaN(msrp) || isNaN(term) || isNaN(residualPercent) || isNaN(moneyFactor) || term <= 0) {
alert("Please enter valid numbers in all required fields.");
return;
}
// 1. Calculate Adjusted Capitalized Cost
var adjCapCost = msrp – downPayment – tradeIn;
// 2. Calculate Residual Value in Dollars
var residualValue = msrp * (residualPercent / 100);
// 3. Calculate Depreciation Fee
var depreciationFee = (adjCapCost – residualValue) / term;
// 4. Calculate Rent Charge (Finance Fee)
// Formula: (Adj Cap Cost + Residual) * Money Factor
var rentCharge = (adjCapCost + residualValue) * moneyFactor;
// 5. Total Monthly Payment
var totalMonthly = depreciationFee + rentCharge;
if (totalMonthly < 0) {
totalMonthly = 0;
}
// Display results
document.getElementById('leaseResultBox').style.display = 'block';
document.getElementById('monthlyPaymentDisplay').innerText = '$' + totalMonthly.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
var breakdownHtml = "Breakdown:" +
"Total Depreciation: $" + (adjCapCost – residualValue).toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "" +
"Monthly Depreciation: $" + depreciationFee.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "" +
"Monthly Rent Charge: $" + rentCharge.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + "" +
"Residual Value at End: $" + residualValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('breakdownDisplay').innerHTML = breakdownHtml;
}