Professional Car Lease Calculator
Estimate your monthly lease payment using MSRP, money factor, and residual values.
Estimated Monthly Payment
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Gross Capitalized Cost:
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Residual Value:
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Depreciation Fee:
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Rent Charge (Finance):
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Total Tax per Month:
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Understanding How Car Lease Payments Are Calculated
Leasing a vehicle is significantly different from traditional financing. Instead of paying for the entire value of the car, you are essentially paying for the depreciation that occurs during the time you drive it, plus interest (known as the Rent Charge).
The Core Components of a Lease
- Gross Capitalized Cost: This is the negotiated price of the vehicle plus any fees or prior lease balances.
- Capitalized Cost Reduction: This includes your down payment, trade-in value, and any manufacturer rebates that lower the amount being financed.
- Residual Value: This is the estimated value of the car at the end of the lease term. It is set by the bank and is usually a percentage of the MSRP.
- Money Factor: This is the lease version of an interest rate. To convert APR to Money Factor, divide the APR by 2400.
Realistic Leasing Example:
If you lease a $40,000 SUV with a 60% residual ($24,000) over 36 months, and you negotiate the price down to $38,000 with $3,000 down:
- Depreciation: ($35,000 Adjusted Cap Cost – $24,000 Residual) / 36 = $305.55/mo.
- Rent Charge: ($35,000 + $24,000) * (0.001875 Money Factor) = $110.63/mo.
- Base Payment: $416.18 + Sales Tax.
How to Use This Calculator
To get the most accurate result, ensure you use the MSRP for the residual value calculation, as banks calculate the percentage based on the sticker price, not your negotiated price. The Negotiated Sales Price (or Selling Price) is what you actually agreed to pay for the car before the down payment is applied.
Tips for a Better Lease Deal
1. Negotiate the Selling Price: Just like buying, the lower the selling price, the lower the depreciation portion of your lease.
2. Check the Money Factor: Some dealers mark up the interest rate. Always ask for the "buy rate" money factor.
3. Watch the Mileage: Choosing a higher mileage limit (e.g., 15,000 vs 12,000) will lower the residual value and increase your payment, but it's cheaper than paying overage fees later.