Calculate your estimated monthly lease payment including depreciation and financing fees.
Net Capitalized Cost:
Monthly Depreciation:
Monthly Rent Charge (Interest):
Total Monthly Payment:
How Car Lease Payments are Calculated
Unlike a standard car loan, a lease payment is primarily based on the vehicle's depreciation during the time you drive it. Instead of paying for the whole car, you are paying for the "slice" of the car's value that you use up.
Key Terms You Need to Know
Gross Capitalized Cost: The agreed-upon price of the vehicle, plus any added fees or taxes.
Capitalized Cost Reductions: Your down payment, trade-in value, and any manufacturer rebates that lower the total amount financed.
Residual Value: The estimated value of the car at the end of the lease. This is set by the leasing company and is non-negotiable.
Money Factor: This is the interest rate expressed as a decimal. To find the equivalent APR, multiply the Money Factor by 2400.
Realistic Example Calculation
Imagine you are leasing a car with an MSRP of $40,000.
Down Payment: $2,000
Term: 36 Months
Residual Value: $24,000 (60%)
Money Factor: 0.0015 (3.6% APR)
Your Net Cap Cost would be $38,000 ($40k – $2k). Your monthly depreciation is ($38,000 – $24,000) / 36 = $388.89. Your monthly rent charge is ($38,000 + $24,000) * 0.0015 = $93.00. Total Payment: $481.89/mo.
Tips for Getting a Lower Lease Payment
To secure the best deal, focus on negotiating the Gross Capitalized Cost just as you would when buying a car. A lower sales price directly reduces your depreciation fee. Additionally, look for "subvented" leases where manufacturers offer artificially high residual values or extremely low money factors to move specific inventory.
function calculateLeasePayment() {
var carPrice = parseFloat(document.getElementById('carPrice').value);
var downPayment = parseFloat(document.getElementById('downPayment').value) || 0;
var tradeIn = parseFloat(document.getElementById('tradeIn').value) || 0;
var leaseTerm = parseFloat(document.getElementById('leaseTerm').value);
var residualValue = parseFloat(document.getElementById('residualValue').value);
var moneyFactor = parseFloat(document.getElementById('moneyFactor').value);
// Validation
if (isNaN(carPrice) || isNaN(leaseTerm) || isNaN(residualValue) || isNaN(moneyFactor) || leaseTerm 0) {
document.getElementById('resNetCap').innerText = "$" + netCapCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resDepreciation').innerText = "$" + monthlyDepreciation.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resInterest').innerText = "$" + monthlyRentCharge.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resTotal').innerText = "$" + totalPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('leaseResult').style.display = 'block';
// Scroll to results on mobile
document.getElementById('leaseResult').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
} else {
alert("The calculation resulted in a negative value. Please check your inputs (e.g., ensure the Residual Value is lower than the Net Cap Cost).");
}
}