Estimate your monthly car lease payments based on MSRP, money factor, and residual value.
Capitalized Cost:$0.00
Residual Value:$0.00
Monthly Depreciation:$0.00
Monthly Finance Charge:$0.00
Total Monthly Payment:$0.00
Understanding Your Car Lease: How It's Calculated
Leasing a vehicle is often more complex than a traditional auto loan because you aren't paying for the entire car; you are paying for the vehicle's depreciation during the time you drive it, plus interest and fees. Using a lease payment calculator helps you uncover the "hidden" numbers dealers use in the F&I office.
Key Components of a Lease Payment
To use the calculator effectively, you need to understand these four critical variables:
Gross Capitalized Cost: This is the price of the vehicle. Just like buying a car, you can and should negotiate this price down from the MSRP.
Residual Value: This is the estimated value of the car at the end of the lease. It is set by the bank. A higher residual value means lower monthly payments because the car depreciates less.
Money Factor: This is essentially the interest rate expressed as a small decimal. To convert APR to Money Factor, divide the APR by 2400.
Cap Cost Reductions: This includes your down payment, trade-in value, and any manufacturer rebates.
The Mathematical Formula
The monthly lease payment consists of two main parts: the Depreciation Fee and the Finance Fee.
1. Depreciation Fee: (Net Capitalized Cost – Residual Value) ÷ Term in Months
Imagine you are leasing a car with the following terms:
Factor
Value
Negotiated Price
$40,000
Down Payment
$4,000
Residual Value (60%)
$24,000
Lease Term
36 Months
Money Factor (0.0025)
6% APR
In this scenario, your monthly depreciation is ($36,000 – $24,000) / 36 = $333.33. Your finance charge is ($36,000 + $24,000) * 0.0025 = $150.00. Your base payment would be $483.33 per month.
Tips for Lowering Your Lease Payment
1. Negotiate the Price: Never lease based on MSRP. Negotiate the "Cap Cost" just like a cash buyer.
2. Watch the Mileage: High-mileage leases (e.g., 15k/year) lower the residual value, increasing your payment. Choose only what you need.
3. Check for Incentives: Manufacturers often offer "subvented" leases with artificially high residuals or low money factors to move specific inventory.
function calculateCarLease() {
// Get Input Values
var price = parseFloat(document.getElementById("vehiclePrice").value);
var down = parseFloat(document.getElementById("downPayment").value) || 0;
var trade = parseFloat(document.getElementById("tradeIn").value) || 0;
var term = parseFloat(document.getElementById("leaseTerm").value);
var apr = parseFloat(document.getElementById("interestRate").value);
var resPerc = parseFloat(document.getElementById("residualPercent").value);
// Validate inputs
if (isNaN(price) || isNaN(term) || isNaN(apr) || isNaN(resPerc) || term <= 0) {
alert("Please enter valid numbers for all fields.");
return;
}
// Calculation Logic
var netCapCost = price – down – trade;
var residualValue = price * (resPerc / 100);
// Depreciation Component
var monthlyDepreciation = (netCapCost – residualValue) / term;
if (monthlyDepreciation < 0) monthlyDepreciation = 0;
// Finance/Rent Charge Component
// Money Factor = APR / 2400
var moneyFactor = apr / 2400;
var monthlyFinance = (netCapCost + residualValue) * moneyFactor;
// Total Payment
var totalMonthly = monthlyDepreciation + monthlyFinance;
// Format results to Currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
});
// Display Results
document.getElementById("resCapCost").innerText = formatter.format(netCapCost);
document.getElementById("resResidualVal").innerText = formatter.format(residualValue);
document.getElementById("resDepreciation").innerText = formatter.format(monthlyDepreciation);
document.getElementById("resFinance").innerText = formatter.format(monthlyFinance);
document.getElementById("resMonthly").innerText = formatter.format(totalMonthly);
// Show result box
document.getElementById("leaseResult").style.display = "block";
}