Car Leasing Payment Calculator
Use this calculator to estimate your potential monthly payment for a car lease. Understanding the key components of a lease can help you make an informed decision.
Estimated Lease Details:
Enter your details and click "Calculate" to see your estimated lease payment.
Understanding Car Leasing
Car leasing is an alternative to buying a vehicle, allowing you to drive a new car for a set period and mileage, typically 24 to 48 months, without owning it outright. Instead of paying for the entire car, you essentially pay for the depreciation of the vehicle during the lease term, plus a finance charge.
Key Terms in Car Leasing:
- Vehicle MSRP (Manufacturer's Suggested Retail Price): This is the sticker price of the car. While you don't buy the car at this price, it's the starting point for calculating the lease.
- Capitalized Cost: This is the agreed-upon price of the vehicle for leasing purposes. It's often negotiable and can be reduced by any down payment, trade-in value, or manufacturer rebates. Our calculator uses "Capitalized Cost Reduction" to represent these upfront payments that lower your effective capitalized cost.
- Residual Value: This is the estimated value of the car at the end of the lease term, expressed as a percentage of the MSRP. The higher the residual value, the less depreciation you pay for, and generally, the lower your monthly payment.
- Lease Term (Months): The duration of your lease agreement, typically ranging from 24 to 48 months.
- Money Factor: This is the financing charge for a lease, similar to an interest rate but expressed as a small decimal (e.g., 0.00150). To convert a money factor to an approximate annual interest rate, multiply it by 2400.
- Sales Tax Rate: Most states apply sales tax to the monthly lease payment, while some apply it to the total capitalized cost. Our calculator assumes it's applied to the monthly payment.
How Car Leasing Works:
When you lease a car, you're paying for two main components:
- Depreciation: This is the difference between the capitalized cost and the residual value, spread out over the lease term.
- Finance Charge: This is calculated based on the average of the capitalized cost and the residual value, multiplied by the money factor.
These two components, along with any applicable sales tax, make up your monthly lease payment. At the end of the lease, you typically have the option to return the car, purchase it for the residual value, or lease a new vehicle.
Benefits of Leasing:
- Lower monthly payments compared to financing a purchase for the same vehicle.
- You can drive a new car more frequently, often with the latest features and technology.
- Most new cars are covered by the manufacturer's warranty for the entire lease term, reducing maintenance costs.
- No hassle of selling a used car at the end of the term.
Drawbacks of Leasing:
- You don't own the car at the end of the lease unless you choose to buy it.
- Mileage restrictions apply, and exceeding them can result in significant penalties.
- Excessive wear and tear charges can be applied at lease end.
- Early termination of a lease can be very expensive.
Using the Calculator:
Input the relevant details for the vehicle you are considering. The "Capitalized Cost Reduction" field allows you to account for any upfront payments or trade-in value that will lower your monthly payment. The "Residual Value (%)" and "Money Factor" are typically provided by the dealership or leasing company. Adjust these values to see how they impact your estimated monthly payment.
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function calculateLeasePayment() {
var msrp = parseFloat(document.getElementById("msrp").value);
var capCostReduction = parseFloat(document.getElementById("capCostReduction").value);
var residualValuePercent = parseFloat(document.getElementById("residualValuePercent").value);
var leaseTermMonths = parseFloat(document.getElementById("leaseTermMonths").value);
var moneyFactor = parseFloat(document.getElementById("moneyFactor").value);
var salesTaxRate = parseFloat(document.getElementById("salesTaxRate").value);
// Input validation
if (isNaN(msrp) || msrp <= 0) {
document.getElementById("result").innerHTML = "Please enter a valid Vehicle MSRP.";
return;
}
if (isNaN(capCostReduction) || capCostReduction = msrp) {
document.getElementById("result").innerHTML = "Capitalized Cost Reduction cannot be greater than or equal to MSRP.";
return;
}
if (isNaN(residualValuePercent) || residualValuePercent 100) {
document.getElementById("result").innerHTML = "Please enter a valid Residual Value Percentage (between 1 and 100).";
return;
}
if (isNaN(leaseTermMonths) || leaseTermMonths <= 0) {
document.getElementById("result").innerHTML = "Please enter a valid Lease Term in months (e.g., 36).";
return;
}
if (isNaN(moneyFactor) || moneyFactor < 0) {
document.getElementById("result").innerHTML = "Please enter a valid Money Factor (0 or more).";
return;
}
if (isNaN(salesTaxRate) || salesTaxRate 100) {
document.getElementById("result").innerHTML = "Please enter a valid Sales Tax Rate (between 0 and 100).";
return;
}
// Step 1: Calculate Adjusted Capitalized Cost
var adjustedCapitalizedCost = msrp – capCostReduction;
// Step 2: Calculate Residual Value Amount
var residualValueAmount = msrp * (residualValuePercent / 100);
// Step 3: Calculate Depreciation Charge
var depreciationCharge = (adjustedCapitalizedCost – residualValueAmount) / leaseTermMonths;
// Step 4: Calculate Finance Charge
var financeCharge = (adjustedCapitalizedCost + residualValueAmount) * moneyFactor;
// Step 5: Calculate Base Monthly Payment (before tax)
var baseMonthlyPayment = depreciationCharge + financeCharge;
// Step 6: Calculate Sales Tax Amount
var taxAmount = baseMonthlyPayment * (salesTaxRate / 100);
// Step 7: Calculate Total Monthly Payment
var totalMonthlyPayment = baseMonthlyPayment + taxAmount;
// Step 8: Calculate Total Lease Cost (simplified, excluding disposition fees, etc.)
var totalLeaseCost = (totalMonthlyPayment * leaseTermMonths) + capCostReduction;
var resultsHtml = "
Your Estimated Lease Payment:
";
resultsHtml += "
Estimated Monthly Payment: $" + totalMonthlyPayment.toFixed(2) + "";
resultsHtml += "
Total Lease Cost (approx.): $" + totalLeaseCost.toFixed(2) + "";
resultsHtml += "
(This estimate includes your capitalized cost reduction and monthly payments, but excludes potential acquisition fees, disposition fees, or excess mileage/wear & tear charges.)";
document.getElementById("result").innerHTML = resultsHtml;
}