Car Lease Payment Calculator
Estimate your monthly lease payment based on the vehicle price, money factor, and residual value.
24 Months
36 Months
48 Months
60 Months
Monthly Depreciation:
$0.00
Monthly Rent Charge:
$0.00
Base Monthly Payment:
$0.00
Monthly Tax:
$0.00
Total Monthly Payment:
$0.00
How Car Lease Payments Are Calculated
Leasing a vehicle can be more complex than a standard purchase. Unlike a traditional loan where you pay for the entire value of the car, a lease only charges you for the portion of the car's value you use over the lease term. This is why lease payments are typically lower than loan payments.
The Three Core Components of a Lease
To use our car lease calculator effectively, you should understand the three primary numbers that dictate your payment:
- Gross Capitalized Cost: This is the negotiated price of the vehicle plus any added fees or taxes. It is the starting point for the lease.
- Residual Value: This is the estimated value of the car at the end of the lease term. A higher residual value means you pay for less depreciation, resulting in a lower monthly payment.
- Money Factor: This represents the interest rate on the lease. To convert a money factor to a traditional APR, multiply it by 2,400. For example, a 0.00125 money factor is equivalent to a 3% APR.
The Lease Payment Formula
The math behind your lease deal follows a specific structure:
- Monthly Depreciation: (Net Cap Cost – Residual Value) / Lease Term
- Monthly Rent Charge: (Net Cap Cost + Residual Value) × Money Factor
- Base Payment: Depreciation + Rent Charge
- Total Payment: Base Payment + Sales Tax
Example Calculation
If you lease a car with a capitalized cost of $35,000, a $3,000 down payment, a 60% residual value ($21,000), and a 36-month term with a 0.00125 money factor:
- Depreciation: ($32,000 – $21,000) / 36 = $305.56
- Rent Charge: ($32,000 + $21,000) × 0.00125 = $66.25
- Total (before tax): $371.81
Tips for Getting a Better Lease Deal
To lower your monthly lease payment, focus on negotiating the Gross Capitalized Cost. Many consumers wrongly believe that the MSRP is fixed on a lease—it is not. Additionally, check for manufacturer incentives (lease cash) that can be used as a "cap cost reduction" to further lower the amount you finance.
Be cautious of putting too much money down. If a leased vehicle is stolen or totaled shortly after you drive off the lot, your insurance pays the leasing company the value of the car, but your down payment is often lost forever.