function calculateLeasePayment() {
var msrp = parseFloat(document.getElementById('msrp').value) || 0;
var salePrice = parseFloat(document.getElementById('salePrice').value) || 0;
var downPayment = parseFloat(document.getElementById('downPayment').value) || 0;
var tradeIn = parseFloat(document.getElementById('tradeIn').value) || 0;
var leaseTerm = parseFloat(document.getElementById('leaseTerm').value) || 0;
var residualPerc = parseFloat(document.getElementById('residualPerc').value) || 0;
var moneyFactor = parseFloat(document.getElementById('moneyFactor').value) || 0;
var taxRate = parseFloat(document.getElementById('taxRate').value) || 0;
if (salePrice <= 0 || leaseTerm <= 0) {
alert("Please enter a valid Sale Price and Lease Term.");
return;
}
// 1. Calculate Gross Cap Cost
var grossCapCost = salePrice;
// 2. Calculate Adjusted Cap Cost
var adjCapCost = grossCapCost – downPayment – tradeIn;
// 3. Calculate Residual Value
var residualValue = msrp * (residualPerc / 100);
// 4. Depreciation Fee = (Adjusted Cap Cost – Residual Value) / Term
var depreciation = (adjCapCost – residualValue) / leaseTerm;
if (depreciation < 0) depreciation = 0;
// 5. Finance Fee = (Adjusted Cap Cost + Residual Value) * Money Factor
var finance = (adjCapCost + residualValue) * moneyFactor;
// 6. Base Payment
var basePayment = depreciation + finance;
// 7. Monthly Tax
var tax = basePayment * (taxRate / 100);
// 8. Total Payment
var totalPayment = basePayment + tax;
// Display results
document.getElementById('totalMonthlyPayment').innerText = '$' + totalPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('depreciationFee').innerText = '$' + depreciation.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('financeFee').innerText = '$' + finance.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('monthlyTax').innerText = '$' + tax.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalCapCost').innerText = '$' + adjCapCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('residualValueAmt').innerText = '$' + residualValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('leaseResultArea').style.display = 'block';
}
Understanding How a Car Lease is Calculated
Leasing a car is often more complex than a standard purchase because you aren't paying for the entire vehicle—you are paying for the depreciation of the vehicle during the time you drive it. This car lease calculator helps you break down the monthly payment into its core components: Depreciation, Finance Fee, and Taxes.
Key Components of a Lease
MSRP: The Manufacturer's Suggested Retail Price. This is used primarily to calculate the Residual Value.
Negotiated Sale Price: Never lease based on MSRP alone. Negotiate the price of the car just as you would if you were buying it.
Residual Value: This is the estimated value of the car at the end of the lease. It is expressed as a percentage of the MSRP. A higher residual value means lower monthly payments.
Money Factor: This is the interest rate on a lease. To convert a money factor to a standard APR, multiply it by 2400 (e.g., 0.00125 x 2400 = 3% APR).
Cap Cost Reduction: This includes your down payment and trade-in value, which reduces the "Adjusted Capitalized Cost."
The Lease Payment Formula
The math behind a lease follows a specific formula used by almost all dealerships:
Monthly Payment = [(Adj. Cap Cost – Residual) / Term] + [(Adj. Cap Cost + Residual) * Money Factor]
The first part is the Depreciation Fee, and the second part is the Finance Fee (also called the Rent Charge). Finally, your local sales tax is applied to the sum of these two figures.
Example Calculation
Imagine you are leasing a $45,000 MSRP car for $42,000. You put $3,000 down, leaving an adjusted capitalized cost of $39,000. If the 36-month residual is 60% ($27,000) and the money factor is 0.00125:
To get the lowest possible payment, focus on three things: negotiating a lower Sale Price, looking for vehicles with high Residual Values (often luxury brands or popular SUVs), and ensuring you qualify for the lowest possible Money Factor based on your credit score.