Car Lease Payment Calculator
Estimated Monthly Payment
$0.00
How to Calculate Your Car Lease Payment
Lease payments are more complex than standard auto loans because you are essentially paying for the depreciation of the vehicle over a set period, rather than the full purchase price. To use this calculator effectively, you need to understand three core components:
1. Capitalized Cost (Cap Cost): This is the "selling price" of the car. Just like buying a car, you can negotiate this price. The "Net Cap Cost" is this price minus your down payment and trade-in value.
2. Residual Value: This is what the leasing company estimates the car will be worth at the end of your lease. It is usually expressed as a percentage of the MSRP. A higher residual value results in a lower monthly payment because the car depreciates less.
3. Money Factor: This is the interest rate for your lease. To convert a Money Factor to a standard APR, multiply it by 2,400. For example, a money factor of 0.0015 is equivalent to a 3.6% APR.
The Lease Formula
The monthly payment is comprised of three parts:
- Depreciation Fee: (Net Cap Cost – Residual Value) / Term
- Finance Fee: (Net Cap Cost + Residual Value) * Money Factor
- Sales Tax: (Depreciation + Finance Fee) * Tax Rate
Example Calculation
If you lease a car priced at $35,000 with a 55% residual value ($19,250) for 36 months, and put $2,000 down:
- Monthly Depreciation: ($33,000 – $19,250) / 36 = $381.94
- Monthly Rent Charge: ($33,000 + $19,250) * 0.0015 = $78.38
- Base Payment: $460.32
- Total with 7% Tax: $492.54