function calculateLease() {
var msrp = parseFloat(document.getElementById('msrp').value) || 0;
var salesPrice = parseFloat(document.getElementById('salesPrice').value) || 0;
var downPayment = parseFloat(document.getElementById('downPayment').value) || 0;
var tradeIn = parseFloat(document.getElementById('tradeIn').value) || 0;
var term = parseFloat(document.getElementById('leaseTerm').value) || 0;
var residualRate = parseFloat(document.getElementById('residualRate').value) || 0;
var mf = parseFloat(document.getElementById('moneyFactor').value) || 0;
var taxRate = parseFloat(document.getElementById('salesTax').value) || 0;
if (msrp <= 0 || term <= 0 || salesPrice <= 0) {
alert("Please enter valid numbers for MSRP, Sales Price, and Term.");
return;
}
var netCapCost = salesPrice – downPayment – tradeIn;
var residualValue = msrp * (residualRate / 100);
var depreciationFee = (netCapCost – residualValue) / term;
var financeFee = (netCapCost + residualValue) * mf;
var monthlySubtotal = depreciationFee + financeFee;
var monthlyTax = monthlySubtotal * (taxRate / 100);
var totalMonthly = monthlySubtotal + monthlyTax;
document.getElementById('monthlyTotal').innerText = '$' + totalMonthly.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('depreciationPart').innerText = '$' + depreciationFee.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('financePart').innerText = '$' + financeFee.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('taxPart').innerText = '$' + monthlyTax.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('capCostTotal').innerText = '$' + netCapCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('residualValResult').innerText = '$' + residualValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('leaseResult').style.display = 'block';
}
How to Calculate a Car Lease Payment
Leasing a car can be a complex process, often involving terminology that differs from a traditional auto loan. Understanding how your monthly payment is calculated can help you negotiate a better deal at the dealership.
Key Lease Terms You Need to Know
Gross Capitalized Cost: The total price of the vehicle including the sales price and any added fees.
Capitalized Cost Reduction: This is your down payment, trade-in credit, or manufacturer rebates that lower the amount you are financing.
Residual Value: The estimated value of the car at the end of the lease term. This is set by the leasing company and is usually non-negotiable.
Money Factor: This represents the interest rate on the lease. To find the equivalent APR, multiply the money factor by 2400.
Lease Term: The duration of the lease, typically expressed in months (e.g., 24, 36, or 48 months).
The Lease Formula Explained
Your monthly lease payment consists of three primary components: Depreciation, Finance Fee (Rent Charge), and Sales Tax.
Depreciation: (Net Capitalized Cost – Residual Value) / Lease Term. You are essentially paying for the portion of the car's value that you "use up" during the lease.
Finance Fee: (Net Capitalized Cost + Residual Value) × Money Factor. This is the cost of borrowing the money to hold the asset.
Sales Tax: In most states, sales tax is applied to the monthly payment rather than the full value of the vehicle.
Example Calculation
Imagine you are leasing a car with an MSRP of $40,000. You negotiate the price down to $38,000. You put $2,000 down, making your Net Capitalized Cost $36,000. If the residual value is 60% ($24,000) for a 36-month lease with a money factor of 0.0015:
To lower your monthly payment, focus on negotiating the Sales Price (the "Cap Cost") just as you would if you were buying the car. Also, ask for the Money Factor—if it seems high, ask the dealer if they are marking it up. Finally, be cautious of putting too much money down on a lease; if the car is totaled or stolen shortly after you drive off the lot, that down payment is often lost forever as insurance pays the leasing company, not you.