function calculateLease() {
var msrp = parseFloat(document.getElementById('msrp').value);
var salePrice = parseFloat(document.getElementById('salePrice').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);
var taxRate = parseFloat(document.getElementById('taxRate').value) / 100;
if (isNaN(msrp) || isNaN(salePrice) || isNaN(leaseTerm) || isNaN(moneyFactor)) {
alert('Please enter valid numerical values.');
return;
}
// 1. Calculate Gross Cap Cost
var grossCapCost = salePrice;
// 2. Calculate Net Cap Cost
var netCapCost = grossCapCost – downPayment – tradeIn;
// 3. Calculate Residual Value
var residualValue = msrp * (residualPercent / 100);
// 4. Monthly Depreciation Fee
var depreciationFee = (netCapCost – residualValue) / leaseTerm;
// 5. Monthly Rent Charge (Finance Fee)
// Formula: (Net Cap Cost + Residual Value) * Money Factor
var rentCharge = (netCapCost + residualValue) * moneyFactor;
// 6. Base Monthly Payment
var basePayment = depreciationFee + rentCharge;
// 7. Total Monthly Payment with Tax
var monthlyTax = basePayment * taxRate;
var totalMonthly = basePayment + monthlyTax;
// Display Results
document.getElementById('leaseResult').style.display = 'block';
document.getElementById('monthlyTotal').innerText = '$' + totalMonthly.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('depreciationPart').innerText = '$' + depreciationFee.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('rentPart').innerText = '$' + rentCharge.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('taxPart').innerText = '$' + monthlyTax.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('buyoutValue').innerText = '$' + residualValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('leaseResult').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}
Understanding How Car Lease Payments are Calculated
A car lease can often feel more complex than a traditional auto loan because of the unique terminology involved. Unlike a loan where you pay for the entire value of the car, a lease only charges you for the portion of the car's value you "consume" during the lease term, plus interest and taxes.
Key Components of a Lease Calculation
Gross Capitalized Cost: This is the "selling price" of the vehicle. Just like buying a car, you can and should negotiate this number.
Residual Value: This is the estimated 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 because you are paying for less depreciation.
Money Factor: This is essentially the interest rate for the lease. To convert a money factor to a standard APR (Annual Percentage Rate), multiply the money factor by 2400. For example, a money factor of 0.0015 is roughly equivalent to 3.6% APR.
Net Capitalized Cost: This is the Gross Cap Cost minus any down payments, trade-ins, or dealer rebates.
The Math Behind the Payment
The monthly lease payment consists of three primary parts:
Depreciation Fee: (Net Cap Cost – Residual Value) / Months in Lease.
Rent Charge: (Net Cap Cost + Residual Value) × Money Factor. This is the interest you pay to the bank.
Taxes: Most states apply sales tax to the monthly payment, though some states require the tax to be paid upfront on the total lease amount.
Example Lease Scenario
Imagine you want to lease a SUV with an MSRP of $40,000. You negotiate the price down to $37,000 and put $3,000 down. The residual value for a 36-month lease is 60% ($24,000), and the money factor is 0.00125.
Your Net Cap Cost would be $34,000. Your monthly depreciation would be ($34,000 – $24,000) / 36 = $277.78. Your rent charge would be ($34,000 + $24,000) × 0.00125 = $72.50. Adding these gives a base payment of $350.28. If your sales tax is 8%, your final monthly payment would be $378.30.
SEO Tip: When using a lease calculator, always check the "Money Factor" provided by the dealer. Dealers can sometimes "mark up" the money factor above the bank's buy rate to increase their profit. Always ask for the "Buy Rate" to ensure you are getting the best deal possible.