function calculateCarLease() {
var msrp = parseFloat(document.getElementById('lease_msrp').value);
var price = parseFloat(document.getElementById('lease_price').value);
var down = parseFloat(document.getElementById('lease_down').value);
var trade = parseFloat(document.getElementById('lease_trade').value);
var term = parseFloat(document.getElementById('lease_term').value);
var residualPct = parseFloat(document.getElementById('lease_residual_pct').value);
var mf = parseFloat(document.getElementById('lease_mf').value);
var taxRate = parseFloat(document.getElementById('lease_tax').value);
if (isNaN(msrp) || isNaN(price) || isNaN(term) || isNaN(residualPct) || isNaN(mf)) {
alert("Please fill in all required fields with valid numbers.");
return;
}
// 1. Adjusted Capitalized Cost
var capCost = price – down – trade;
// 2. Residual Value
var residualValue = msrp * (residualPct / 100);
// 3. Monthly Depreciation
// (Cap Cost – Residual Value) / Term
var depreciation = (capCost – residualValue) / term;
if (depreciation < 0) depreciation = 0;
// 4. Rent Charge (Finance Fee)
// (Cap Cost + Residual Value) * Money Factor
var rentCharge = (capCost + residualValue) * mf;
// 5. Base Payment
var basePayment = depreciation + rentCharge;
// 6. Tax
var monthlyTax = basePayment * (taxRate / 100);
// 7. Total
var totalPayment = basePayment + monthlyTax;
// Display Results
document.getElementById('res_depreciation').innerText = "$" + depreciation.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_finance').innerText = "$" + rentCharge.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_base').innerText = "$" + basePayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_tax').innerText = "$" + monthlyTax.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_total').innerText = "$" + totalPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('lease_result_box').style.display = 'block';
}
Understanding Your Car Lease Calculation
Leasing a car is often more complex than a standard auto loan. While a loan is based on the total purchase price, a lease is essentially paying for the depreciation of the vehicle over a set period, plus interest and taxes.
Key Leasing Terms Explained
Gross Capitalized Cost: This is the "negotiated price" of the vehicle. Just because you are leasing doesn't mean you shouldn't negotiate the sticker price (MSRP) down.
Residual Value: This is the estimated value of the car at the end of the lease. It is set by the leasing company. A higher residual value usually results in a lower monthly payment because you are financing less depreciation.
Money Factor: This is the lease version of an interest rate. To convert the Money Factor to a standard APR, multiply it by 2400. For example, a money factor of 0.00125 equals a 3% APR.
Adjusted Capitalized Cost: This is the negotiated price minus any "capitalized cost reductions" like your down payment or trade-in value.
The Calculation Formula
The monthly lease payment consists of three primary parts:
Depreciation Fee: (Adjusted Cap Cost – Residual Value) ÷ Term in Months
Sales Tax: (Depreciation + Finance Fee) × Local Tax Rate
Leasing Strategy Example
Imagine you want to lease a SUV with an MSRP of $40,000. You negotiate the price down to $37,000. The bank sets the residual value at 60% ($24,000) for a 36-month term. With a down payment of $3,000, your adjusted cap cost is $34,000.
Your monthly depreciation would be ($34,000 – $24,000) / 36 = $277.77. If your money factor is 0.0015 (3.6% APR), your rent charge is ($34,000 + $24,000) * 0.0015 = $87.00. Adding these together plus tax gives you your final monthly commitment.
Pro Tip: The "Zero Down" Rule
Many financial experts recommend putting as little money down as possible on a lease. If the car is totaled or stolen shortly after you drive off the lot, the insurance payout goes to the leasing company, and you may never recover your initial down payment.