Estimate your monthly lease payments with precision
Note: Money Factor = APR / 2400
Gross Capitalized Cost:$0.00
Residual Value:$0.00
Monthly Depreciation:$0.00
Monthly Rent Charge:$0.00
Estimated Monthly Payment:$0.00
How Car Lease Payments Are Calculated
Understanding a car lease can be complex because it differs significantly from a traditional auto loan. When you lease, you are essentially paying for the vehicle's depreciation over the term of the lease, plus a finance fee called the Rent Charge.
The calculation is broken down into three primary components:
Depreciation Fee: This is the (Adjusted Capitalized Cost – Residual Value) / Term. It covers the value the car loses while you drive it.
Rent Charge: This is calculated as (Adjusted Capitalized Cost + Residual Value) × Money Factor. This is effectively the interest you pay to the leasing company.
Sales Tax: Most states apply sales tax to each monthly payment, though this calculator focuses on the base pre-tax payment.
What is Money Factor?
The money factor is the lease's interest rate expressed in a different format. To convert a standard APR to a money factor, divide by 2400. For example, an APR of 3% is a money factor of 0.00125. A lower money factor means lower interest costs.
Realistic Example:
Imagine you are leasing a SUV with an MSRP of $40,000. You negotiate the price to $38,000 and put $3,000 down. The bank sets a residual value of 55% ($22,000) after 36 months with a money factor of 0.0015 (3.6% APR).
To lower your monthly payment, focus on these three levers:
Negotiate the Sale Price: The "Cap Cost" is negotiable just like a purchase price. A lower sale price reduces the depreciation you pay.
Check the Residual Value: Higher residual values result in lower monthly payments because the car "holds its value" better, leaving you with less depreciation to cover.
Verify the Money Factor: Dealers sometimes "mark up" the money factor provided by the bank. Always ask for the base rate.
function calculateLease() {
// Get values from inputs
var msrp = parseFloat(document.getElementById("msrp").value);
var downPayment = parseFloat(document.getElementById("downPayment").value) || 0;
var tradeIn = parseFloat(document.getElementById("tradeIn").value) || 0;
var term = parseFloat(document.getElementById("leaseTerm").value);
var residualRate = parseFloat(document.getElementById("residualRate").value);
var mf = parseFloat(document.getElementById("moneyFactor").value);
// Basic Validation
if (isNaN(msrp) || isNaN(term) || isNaN(residualRate) || isNaN(mf) || term <= 0) {
alert("Please enter valid positive numbers for all fields.");
return;
}
// Calculation Logic
// 1. Adjusted Capitalized Cost (The amount being financed)
var adjCapCost = msrp – downPayment – tradeIn;
// 2. Residual Value
var residualValue = msrp * (residualRate / 100);
// 3. Monthly Depreciation Fee
// (Cap Cost – Residual) / Term
var monthlyDepreciation = (adjCapCost – residualValue) / term;
// Check if residual is higher than cap cost (rare, but handle it)
if (monthlyDepreciation 0.5) {
finalMf = mf / 2400; // Auto-convert APR to MF if user entered a whole number rate
}
var monthlyRent = (adjCapCost + residualValue) * finalMf;
// 5. Total Payment
var totalMonthly = monthlyDepreciation + monthlyRent;
// Display Results
document.getElementById("resGrossCap").innerText = "$" + adjCapCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resResidual").innerText = "$" + residualValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resDepreciation").innerText = "$" + monthlyDepreciation.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resRent").innerText = "$" + monthlyRent.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resTotalPayment").innerText = "$" + totalMonthly.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
// Show result box
document.getElementById("leaseResult").style.display = "block";
}