function calculateLease() {
var msrp = parseFloat(document.getElementById('msrp').value);
var downPayment = parseFloat(document.getElementById('downPayment').value) || 0;
var tradeIn = parseFloat(document.getElementById('tradeIn').value) || 0;
var leaseTerm = parseFloat(document.getElementById('leaseTerm').value);
var residualPercent = parseFloat(document.getElementById('residualPercent').value);
var moneyFactor = parseFloat(document.getElementById('moneyFactor').value);
if (isNaN(msrp) || isNaN(leaseTerm) || isNaN(residualPercent) || isNaN(moneyFactor) || leaseTerm <= 0) {
alert('Please enter valid numerical values for all required fields.');
return;
}
// Adjusted Capitalized Cost
var capCost = msrp – downPayment – tradeIn;
// Residual Value calculation
var residualValue = msrp * (residualPercent / 100);
// Monthly Depreciation Part
var depreciation = (capCost – residualValue) / leaseTerm;
// Monthly Rent Charge (Interest) Part
// Formula: (Net Cap Cost + Residual Value) * Money Factor
var rentCharge = (capCost + residualValue) * moneyFactor;
var totalMonthly = depreciation + rentCharge;
if (totalMonthly < 0) totalMonthly = 0;
document.getElementById('paymentDisplay').innerText = '$' + totalMonthly.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('depreciationPart').innerText = '$' + depreciation.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('rentPart').innerText = '$' + rentCharge.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('residualAmt').innerText = '$' + residualValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('capCostAmt').innerText = '$' + capCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('leaseResult').style.display = 'block';
}
Understanding Your Car Lease Calculation
Leasing a vehicle is often more complex than a standard car loan. Unlike a loan where you pay for the entire value of the car plus interest, a lease essentially covers the depreciation of the vehicle during the time you drive it, plus a finance fee called the money factor.
Key Leasing Terms You Need to Know
Gross Capitalized Cost: This is the negotiated price of the vehicle. Always negotiate the sales price before mentioning a lease.
Residual Value: This is the estimated value of the car at the end of the lease term. Higher residual values lead to lower monthly payments because you are paying for less depreciation.
Money Factor: This is the lease interest rate. To convert a money factor to a standard APR percentage, multiply it by 2,400. For example, a 0.00125 money factor is equal to a 3% APR.
Capitalized Cost Reduction: Anything that reduces the amount being financed, such as a down payment, trade-in, or rebates.
How the Math Works
The monthly lease payment consists of two primary components:
By adding these two figures together, you get your base monthly payment. Note that sales tax is typically added to this amount depending on your local state laws.
Example Calculation
Imagine you are leasing a car with an MSRP of $40,000 for 36 months. The dealer offers a 60% residual and a money factor of 0.0015 (3.6% APR). You put $2,000 down.
Total Payment: $388.89 + $93.00 = $481.89 per month
Pro Tips for Leasing
To get the best deal, look for "subvented" leases where manufacturers artificially inflate the residual value or lower the money factor to move specific inventory. Always ask for the "buy rate" on the money factor to ensure the dealership hasn't added a hidden markup to the interest rate.