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Car Lease Calculator

24 Months 36 Months 48 Months
Note: APR / 2400 = Money Factor

Your Estimated Monthly Payment

$0.00
Depreciation Fee:
Financing Fee:
Tax Amount:
Total Cost of Lease:
function calculateLease() { var msrp = parseFloat(document.getElementById('msrp').value) || 0; var salePrice = parseFloat(document.getElementById('salePrice').value) || 0; var downPayment = parseFloat(document.getElementById('downPayment').value) || 0; var tradeIn = parseFloat(document.getElementById('tradeIn').value) || 0; var leaseTerm = parseFloat(document.getElementById('leaseTerm').value) || 36; var residualPercent = parseFloat(document.getElementById('residualPercent').value) || 0; var moneyFactor = parseFloat(document.getElementById('moneyFactor').value) || 0; var salesTax = parseFloat(document.getElementById('salesTax').value) || 0; if (msrp <= 0 || salePrice <= 0 || residualPercent <= 0) { alert("Please enter valid numbers for MSRP, Sale Price, and Residual Value."); return; } // 1. Adjusted Capitalized Cost var adjustedCapCost = salePrice – downPayment – tradeIn; // 2. Residual Value var residualValue = msrp * (residualPercent / 100); // 3. Monthly Depreciation Fee var depreciationFee = (adjustedCapCost – residualValue) / leaseTerm; if (depreciationFee < 0) depreciationFee = 0; // 4. Monthly Financing Fee (Rent Charge) var rentCharge = (adjustedCapCost + residualValue) * moneyFactor; // 5. Subtotal and Tax var basePayment = depreciationFee + rentCharge; var monthlyTax = basePayment * (salesTax / 100); var totalMonthly = basePayment + monthlyTax; // 6. Total Cost of Lease var totalCost = (totalMonthly * leaseTerm) + downPayment + tradeIn; // Display Results document.getElementById('monthlyPaymentDisplay').innerText = '$' + totalMonthly.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resDepreciation').innerText = '$' + depreciationFee.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resFinance').innerText = '$' + rentCharge.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resTax').innerText = '$' + monthlyTax.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resTotalCost').innerText = '$' + totalCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('leaseResult').style.display = 'block'; }

Understanding Car Lease Math: A Complete Guide

Leasing a vehicle can be a confusing process filled with industry jargon like "Money Factor" and "Residual Value." Unlike a standard auto loan, where you pay down the principal of the car's full value, a lease essentially pays for the depreciation of the vehicle over a set period, plus interest and fees.

Key Components of a Lease Calculation

To use our car lease calculator effectively, it is important to understand the variables that determine your monthly bill:

  • MSRP (Sticker Price): The manufacturer's suggested retail price. This is the starting point for calculating the residual value.
  • Negotiated Price (Capitalized Cost): This is the actual price you agree to pay for the car. Just like buying, you should always negotiate the price of a leased car.
  • Residual Value: This is the estimated worth of the car at the end of the lease. A higher residual value percentage means lower monthly payments because you are "using up" less of the car's value.
  • Money Factor: This represents the interest rate. To convert the money factor to a standard APR, multiply it by 2400. For example, a money factor of 0.00125 equals a 3% APR.
  • Down Payment (Cap Cost Reduction): Cash paid upfront to reduce the capitalized cost, which in turn lowers the monthly payment.

The Lease Formula Explained

Our calculator uses the standard industry formula to ensure accuracy:

Monthly Payment = Depreciation Fee + Rent Charge + Taxes

1. Depreciation Fee: (Adjusted Cap Cost – Residual Value) ÷ Lease Term.

2. Rent Charge: (Adjusted Cap Cost + Residual Value) × Money Factor.

Example Calculation

Imagine you are leasing a SUV with an MSRP of $40,000. You negotiate the price down to $37,000 and put $3,000 down. The 36-month lease has a 60% residual ($24,000) and a money factor of 0.0015.

  • Depreciation: ($34,000 – $24,000) / 36 = $277.78
  • Rent Charge: ($34,000 + $24,000) * 0.0015 = $87.00
  • Total (Pre-tax): $277.78 + $87.00 = $364.78 per month

Tips for Getting the Best Lease Deal

  1. Negotiate the Sale Price: Many people believe you can't negotiate a lease. You can and should. Lowering the sale price is the most effective way to lower the payment.
  2. Check for Hidden Fees: Look out for high acquisition fees (charged by the bank) and disposition fees (charged at the end of the lease).
  3. Watch Your Mileage: Most leases allow 10,000 to 12,000 miles per year. Exceeding these limits can result in penalties of $0.15 to $0.30 per mile at the end of the term.
  4. Gap Insurance: Ensure your lease includes "Gap Insurance." If the car is totaled, this covers the difference between what the car is worth and what you still owe the leasing company.

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