Estimate your monthly lease costs and total depreciation
24 Months
36 Months
48 Months
60 Months
Note: APR / 2400 = Money Factor
Estimated Monthly Payment
$0.00
Total Depreciation:$0.00
Monthly Rent Charge:$0.00
Residual Amount:$0.00
Total Lease Cost:$0.00
How Car Lease Payments are Calculated
A car lease payment isn't just a random number based on the price of the car. It is mathematically derived from how much value the car loses over time and the "rent charge" for using the bank's money. Understanding these variables can help you negotiate a better deal at the dealership.
The Key Components
Gross Capitalized Cost: The total price of the vehicle including options, taxes, and fees.
Capitalized Cost Reduction: Anything that lowers the financed amount, such as your down payment, trade-in equity, or manufacturer rebates.
Residual Value: The estimated value of the car at the end of the lease term. This is set by the leasing company. A higher residual value usually means a lower monthly payment.
Money Factor: This is the interest rate expressed as a decimal. To convert it to a standard APR, multiply the money factor by 2,400.
The Formula
Monthly Payment = Depreciation Fee + Rent Charge
Depreciation Fee = (Adjusted Cap Cost – Residual Value) / Term
Imagine you are leasing a car with an MSRP of $35,000. You put $3,000 down. The residual value is 60% ($21,000) after 36 months. The money factor is 0.00125 (equivalent to 3% APR).