Car Lease Monthly Payment Calculator
Estimate your monthly car lease payments by entering the vehicle price, money factor, and residual value.
Estimated Monthly Payment
$0.00
Depreciation: $0
Finance Fee: $0
Tax: $0
How Car Lease Payments are Calculated
Unlike a standard auto loan where you pay for the entire value of the vehicle, a lease payment is based on the difference between the car's current price and its predicted value at the end of the lease. This is broken down into three main parts:
1. Depreciation Fee
This is the primary part of your payment. It covers the loss in the vehicle's value over the time you drive it. The formula is:
(Net Capitalized Cost – Residual Value) / Term in Months
2. Money Factor (Rent Charge)
The Money Factor is essentially the interest rate on a lease. To convert it to a familiar APR, multiply the money factor by 2,400. For example, a money factor of 0.00125 is equal to a 3% APR. The finance fee is calculated as:
(Net Capitalized Cost + Residual Value) × Money Factor
3. Sales Tax
In most states, sales tax is applied to the monthly lease payment rather than the full price of the car. If your state taxes the full lease amount upfront, your monthly payment will reflect the base payment only.
Car Leasing Terms to Know
- MSRP: The Manufacturer's Suggested Retail Price (the "sticker" price).
- Gross Capitalized Cost: The agreed-upon price of the vehicle plus any added fees or service contracts.
- Residual Value: The estimated value of the car at the end of the lease. This is set by the bank and is non-negotiable.
- Cap Cost Reduction: Any amount that reduces the price you're financing, such as a down payment, trade-in, or rebates.
Example Calculation
If you lease a car with an MSRP of $30,000, a residual of 60% ($18,000), and a sales price of $28,000 over 36 months:
- Depreciation: ($28,000 – $18,000) / 36 = $277.78 per month.
- Finance Fee: ($28,000 + $18,000) * 0.00125 = $57.50 per month.
- Total Base: $335.28 + Tax.