function calculateLease() {
var carPrice = parseFloat(document.getElementById('carPrice').value) || 0;
var residualPercent = parseFloat(document.getElementById('residualPercent').value) || 0;
var downPayment = parseFloat(document.getElementById('downPayment').value) || 0;
var tradeIn = parseFloat(document.getElementById('tradeIn').value) || 0;
var leaseTerm = parseFloat(document.getElementById('leaseTerm').value) || 0;
var moneyFactor = parseFloat(document.getElementById('moneyFactor').value) || 0;
var salesTax = parseFloat(document.getElementById('salesTax').value) || 0;
if (leaseTerm <= 0) {
alert("Lease term must be greater than zero.");
return;
}
// Calculation Logic
var netCapCost = carPrice – downPayment – tradeIn;
var residualAmount = carPrice * (residualPercent / 100);
// 1. Depreciation Component
var monthlyDepreciation = (netCapCost – residualAmount) / leaseTerm;
if (monthlyDepreciation < 0) monthlyDepreciation = 0;
// 2. Rent Charge Component (Money Factor * (Net Cap Cost + Residual))
var monthlyRentCharge = (netCapCost + residualAmount) * moneyFactor;
// 3. Subtotal and Tax
var basePayment = monthlyDepreciation + monthlyRentCharge;
var monthlyTax = basePayment * (salesTax / 100);
var totalMonthlyPayment = basePayment + monthlyTax;
// Display Results
document.getElementById('leaseResult').style.display = 'block';
document.getElementById('monthlyTotal').innerText = '$' + totalMonthlyPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('depreciationVal').innerText = '$' + monthlyDepreciation.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('rentVal').innerText = '$' + monthlyRentCharge.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('taxVal').innerText = '$' + monthlyTax.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('netCapCostVal').innerText = '$' + netCapCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('residualAmtVal').innerText = '$' + residualAmount.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
}
How to Calculate a Car Lease Payment
Understanding car lease math can save you thousands of dollars at the dealership. Unlike a standard car loan where you pay down the entire principal, a lease only requires you to pay for the vehicle's depreciation during the time you drive it, plus interest and taxes.
The Key Components of a Lease
Negotiated Price (Capitalized Cost): This is the "sale price" of the car. Just like buying, you should always negotiate this number down from the MSRP.
Residual Value: This is the predicted value of the car at the end of the lease. It is set by the leasing company. A higher residual value results in a lower monthly payment.
Money Factor: This is the lease's interest rate expressed as a decimal. To convert a money factor to a standard APR, multiply it by 2400. (e.g., 0.00125 x 2400 = 3% APR).
Lease Term: The duration of the lease, typically 24, 36, or 48 months.
Realistic Example
Imagine you are leasing a car with an MSRP of $35,000. You negotiate the price down to $32,000 and put $2,000 down. Your Net Capitalized Cost is $30,000.
If the 36-month residual value is 60%, the car is expected to be worth $21,000 at the end of the term. You are responsible for the $9,000 difference ($30,000 – $21,000). Divided by 36 months, your Depreciation Fee is $250/month.
Next, the Rent Charge is calculated. Using a money factor of 0.00125: ($30,000 + $21,000) * 0.00125 = $63.75/month. Adding these together plus a 7.5% sales tax results in a total payment of approximately $337.28/month.
Expert Lease Negotiation Tips
Negotiate the Price, Not the Payment: Dealerships often hide high interest rates or low residuals by focusing only on the monthly figure. Always agree on the vehicle price first.
Check the Money Factor: Some dealers "mark up" the money factor provided by the bank. Ask for the "buy rate" to ensure you are getting the best interest rate possible.
Avoid Large Down Payments: In a lease, if the car is totaled or stolen early on, your down payment is often lost. It is generally safer to put $0 down if your credit allows.