function calculateLease() {
var msrp = parseFloat(document.getElementById('msrp').value) || 0;
var salesPrice = parseFloat(document.getElementById('salesPrice').value) || 0;
var downPayment = parseFloat(document.getElementById('downPayment').value) || 0;
var tradeIn = parseFloat(document.getElementById('tradeIn').value) || 0;
var term = parseFloat(document.getElementById('leaseTerm').value) || 1;
var resPercent = parseFloat(document.getElementById('residualPercent').value) || 0;
var moneyFactor = parseFloat(document.getElementById('moneyFactor').value) || 0;
var taxRate = parseFloat(document.getElementById('salesTax').value) || 0;
if (msrp <= 0 || salesPrice <= 0) {
alert("Please enter a valid MSRP and Negotiated Price.");
return;
}
// 1. Gross Capitalized Cost
var grossCapCost = salesPrice;
// 2. Adjusted Capitalized Cost
var adjCapCost = grossCapCost – downPayment – tradeIn;
// 3. Residual Value
var residualValue = msrp * (resPercent / 100);
// 4. Depreciation Fee
var depreciationFee = (adjCapCost – residualValue) / term;
// 5. Rent Charge (Finance Fee)
var rentCharge = (adjCapCost + residualValue) * moneyFactor;
// 6. Base Monthly Payment
var basePayment = depreciationFee + rentCharge;
// 7. Monthly Tax
var monthlyTax = basePayment * (taxRate / 100);
// 8. Total Payment
var totalPayment = basePayment + monthlyTax;
// Validation for negative depreciation (if sales price is lower than residual)
if (totalPayment < 0) totalPayment = 0;
// Display results
document.getElementById('monthlyPaymentOutput').innerHTML = "$" + totalPayment.toFixed(2);
document.getElementById('outDepreciation').innerHTML = "$" + depreciationFee.toFixed(2);
document.getElementById('outRent').innerHTML = "$" + rentCharge.toFixed(2);
document.getElementById('outTax').innerHTML = "$" + monthlyTax.toFixed(2);
document.getElementById('outCapCost').innerHTML = "$" + adjCapCost.toFixed(2);
document.getElementById('leaseResult').style.display = 'block';
}
Understanding Your Car Lease Calculation
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 different from a traditional car loan. Unlike a loan where you pay for the entire value of the vehicle plus interest, a lease primarily charges you for the depreciation that occurs during the time you drive it.
Key Components of a Lease Payment
Gross Capitalized Cost: This is the "sales price" of the car. Just like buying a car, you should negotiate this number. Never pay full MSRP if you can help it.
Capitalized Cost Reduction: This includes your down payment, trade-in value, and any manufacturer rebates. This lowers the amount being financed.
Residual Value: This is the estimated value of the car at the end of the lease. It is set by the bank and usually expressed as a percentage of the original MSRP.
Money Factor: This is the interest rate on a lease. To find the equivalent APR, multiply the money factor by 2400. For example, a money factor of 0.00125 equals a 3% APR.
Calculation Example
Imagine you are leasing a car with the following terms:
Metric
Value
MSRP
$40,000
Negotiated Price
$37,000
Residual (60%)
$24,000
Term
36 Months
In this scenario, you are responsible for paying the $13,000 difference ($37k – $24k) over 36 months, which is roughly $361/month for depreciation, plus the rent charge and taxes.
Pro Tip for Lower Payments
To get the lowest possible lease payment, focus on three things: negotiating a lower sales price, choosing a vehicle with a high residual value (cars that hold their value well), and ensuring you have a good credit score to qualify for the lowest possible money factor.