Advanced Car Lease Calculator
Estimate your monthly lease payment using MSRP, Money Factor, and Residual Value.
Estimated Monthly Payment
$0.00
Depreciation Fee: $0.00
Finance Fee: $0.00
Monthly Tax: $0.00
How to Use the Car Lease Calculator
Understanding the financial mechanics of a car lease can save you thousands of dollars at the dealership. Unlike a traditional car loan, where you pay for the entire value of the vehicle, a lease only charges you for the portion of the car's value that you "use up" during the term.
Our Car Lease Calculator uses the industry-standard formula to break down your costs into three distinct parts: Depreciation, Rent Charge (Interest), and Taxes.
Key Lease Terms Explained
To get the most accurate results, you need to understand these critical variables:
- MSRP: The Manufacturer's Suggested Retail Price. You should always try to negotiate the "Gross Capitalized Cost" lower than this number.
- Residual Value: This is the predicted value of the car at the end of the lease. It is expressed as a percentage of the MSRP. A higher residual value results in a lower monthly payment.
- Money Factor: This is the lease version of an interest rate. To convert a Money Factor to APR, multiply it by 2400. For example, a 0.00125 MF is roughly equivalent to a 3% APR.
- Capitalized Cost Reduction: This is your down payment, trade-in equity, or rebates that lower the amount being financed.
Example Lease Calculation
Imagine you are leasing a car with an MSRP of $40,000 for 36 months. The dealer gives you a 60% Residual Value ($24,000) and a Money Factor of 0.0015. You put $2,000 down.
1. Your Depreciation Fee would be ($38,000 – $24,000) / 36 = $388.88.
2. Your Finance Fee (Rent Charge) would be ($38,000 + $24,000) * 0.0015 = $93.00.
3. Your base payment is $481.88. After applying a 7% tax, your total monthly payment would be roughly $515.61.
Strategies for a Lower Payment
To secure the best deal, focus on negotiating the sales price (Capitalized Cost) rather than just the monthly payment. Additionally, look for cars with high residual values and promotional money factors (often called "subvented" rates) offered by the manufacturer's captive finance arm.