function calculateLease() {
var msrp = parseFloat(document.getElementById('msrp').value);
var negotiatedPrice = parseFloat(document.getElementById('negotiatedPrice').value);
var downPayment = parseFloat(document.getElementById('downPayment').value);
var tradeIn = parseFloat(document.getElementById('tradeIn').value);
var term = parseFloat(document.getElementById('leaseTerm').value);
var residualPercent = parseFloat(document.getElementById('residualPercent').value) / 100;
var moneyFactor = parseFloat(document.getElementById('moneyFactor').value);
var taxRate = parseFloat(document.getElementById('taxRate').value) / 100;
if (isNaN(msrp) || isNaN(negotiatedPrice) || term <= 0) {
alert("Please enter valid vehicle and term information.");
return;
}
var residualValue = msrp * residualPercent;
var capCost = negotiatedPrice – downPayment – tradeIn;
// 1. Depreciation Fee = (Gross Cap Cost – Residual Value) / Term
var monthlyDepreciation = (capCost – residualValue) / term;
if (monthlyDepreciation < 0) monthlyDepreciation = 0;
// 2. Rent Charge = (Gross Cap Cost + Residual Value) × Money Factor
var monthlyRent = (capCost + residualValue) * moneyFactor;
// 3. Base Payment
var basePayment = monthlyDepreciation + monthlyRent;
// 4. Monthly Tax
var monthlyTax = basePayment * taxRate;
// 5. Total Payment
var totalMonthly = basePayment + monthlyTax;
document.getElementById('resValDisplay').innerText = '$' + residualValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('deprecDisplay').innerText = '$' + monthlyDepreciation.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('rentDisplay').innerText = '$' + monthlyRent.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('basePayDisplay').innerText = '$' + basePayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalPayDisplay').innerText = '$' + totalMonthly.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('leaseResult').style.display = 'block';
}
How Does Car Leasing Math Work?
Calculating a car lease is significantly different from calculating a standard auto loan. While a loan pays off the entire value of the vehicle plus interest, a lease essentially pays for the depreciation of the vehicle over a specific period, plus a financing fee known as the Money Factor.
Key Components of Your Lease Payment
Gross Capitalized Cost: This is the "selling price" of the vehicle. Just like buying a car, you should negotiate this price rather than accepting the MSRP.
Residual Value: This is the estimated value of the car at the end of the lease. It is set by the bank or leasing company. A higher residual value results in a lower monthly payment because you are "using" less of the car's value.
Money Factor: This represents the interest rate. To convert the money factor to a standard APR, multiply it by 2400 (e.g., 0.00125 x 2400 = 3% APR).
Depreciation Fee: This is the bulk of your payment. It is calculated by taking the Capitalized Cost minus the Residual Value, divided by the number of months in the lease.
Example Lease Calculation
Imagine you are leasing a vehicle with an MSRP of $40,000 but you negotiated the price down to $38,000. You put $3,000 down. The 36-month residual is 60% ($24,000) and the Money Factor is 0.0015.
Negotiate the Price: The lower the negotiated price (Cap Cost), the lower your depreciation fee.
Check Manufacturers Specials: Often called "Subvented Leases," manufacturers may offer artificially high residual values or low money factors to move inventory.
Keep an Eye on the Money Factor: Ensure the dealer isn't marking up the money factor beyond the "buy rate" provided by the bank.