Estimate your monthly lease payment based on MSRP, money factor, and residual value.
Note: APR / 2400 = Money Factor
Estimated Monthly Payment
$0.00
Gross Capitalized Cost:
Net Capitalized Cost:
Residual Value:
Monthly Depreciation:
Monthly Rent Charge:
Monthly Tax:
function calculateLeasePayment() {
var msrp = parseFloat(document.getElementById('msrp').value);
var salesPrice = parseFloat(document.getElementById('salesPrice').value);
var downPayment = parseFloat(document.getElementById('downPayment').value) || 0;
var tradeIn = parseFloat(document.getElementById('tradeIn').value) || 0;
var term = parseFloat(document.getElementById('leaseTerm').value);
var moneyFactor = parseFloat(document.getElementById('moneyFactor').value);
var residualPercent = parseFloat(document.getElementById('residualPercent').value);
var taxRate = parseFloat(document.getElementById('salesTax').value) || 0;
if (isNaN(msrp) || isNaN(salesPrice) || isNaN(term) || isNaN(moneyFactor) || isNaN(residualPercent)) {
alert("Please enter valid numbers in all required fields.");
return;
}
// 1. Calculate Residual Value
var residualValue = msrp * (residualPercent / 100);
// 2. Calculate Net Capitalized Cost
var netCapCost = salesPrice – downPayment – tradeIn;
// 3. Monthly Depreciation
var monthlyDepreciation = (netCapCost – residualValue) / term;
if (monthlyDepreciation < 0) monthlyDepreciation = 0;
// 4. Monthly Rent Charge (Money Factor calculation)
var monthlyRent = (netCapCost + residualValue) * moneyFactor;
// 5. Pre-tax subtotal
var subtotal = monthlyDepreciation + monthlyRent;
// 6. Tax (Applied to monthly payment in most states)
var monthlyTax = subtotal * (taxRate / 100);
// 7. Total Monthly Payment
var totalPayment = subtotal + monthlyTax;
// Display Results
document.getElementById('monthlyTotal').innerText = "$" + totalPayment.toFixed(2);
document.getElementById('resGrossCap').innerText = "$" + salesPrice.toLocaleString();
document.getElementById('resNetCap').innerText = "$" + netCapCost.toLocaleString();
document.getElementById('resResidual').innerText = "$" + residualValue.toLocaleString();
document.getElementById('resDepreciation').innerText = "$" + monthlyDepreciation.toFixed(2);
document.getElementById('resRent').innerText = "$" + monthlyRent.toFixed(2);
document.getElementById('resTax').innerText = "$" + monthlyTax.toFixed(2);
document.getElementById('resultBox').style.display = 'block';
}
Understanding How Your Car Lease is Calculated
Leasing a car can be a cost-effective way to drive a new vehicle every few years, but the math behind the monthly payment is often more complex than a standard auto loan. To get the best deal, you need to understand the three main components: Depreciation, Rent Charge, and Taxes.
1. Capitalized Cost (The Sales Price)
The "Gross Cap Cost" is essentially the price you negotiate for the vehicle. Just like buying a car, you can and should negotiate the sales price of a lease. The "Net Cap Cost" is the sales price minus any down payment (cap cost reduction), trade-in equity, or dealer rebates.
2. Residual Value
The residual value is what the leasing company predicts the car will be worth at the end of your lease term. It is calculated as a percentage of the MSRP (sticker price), not the negotiated sales price. A higher residual value results in a lower monthly payment because you are responsible for paying for less of the car's value over time.
3. The Money Factor (Interest Rate)
The Money Factor represents the interest rate on a lease. It is expressed as a small decimal (e.g., 0.00125). To convert the Money Factor to a standard Annual Percentage Rate (APR), multiply it by 2,400. Conversely, if a dealer gives you an APR, divide it by 2,400 to find the Money Factor for this calculator.
The Lease Formula
The calculation follows this standard industry formula:
Monthly Depreciation: (Net Cap Cost – Residual Value) / Lease Term
Monthly Tax: (Depreciation + Rent Charge) × Local Tax Rate
Example Calculation
Imagine you are leasing a car with an MSRP of $40,000:
Negotiated Price: $38,000
Down Payment: $2,000 (Net Cap Cost = $36,000)
Residual Value: 60% ($24,000)
Lease Term: 36 Months
Money Factor: 0.0015 (3.6% APR)
In this scenario, your monthly depreciation would be $333.33 ($12,000 / 36) and your rent charge would be $90.00 ($60,000 * 0.0015). Before taxes, your payment would be $423.33.
Pro Tips for a Better Lease Deal
Negotiate the Price: Never accept the MSRP as the starting point for a lease. The lower the sales price, the lower your payment.
Check the Residual: Some cars hold their value better than others. Research vehicles with high residual values to lower your monthly costs.
Avoid Large Down Payments: In a lease, if the car is totaled or stolen shortly after you drive off the lot, your down payment is often lost. Most experts recommend putting as little money down as possible ("Zero Drive-Off").