Car Lease Monthly Payment Calculator
Estimate your monthly auto lease payments based on MSRP, money factor, and residual value.
Understanding How Your Car Lease is Calculated
Leasing a vehicle can be more complex than buying because you aren't paying for the whole car; you are paying for the vehicle's depreciation over a specific period, plus interest and taxes.
1. Negotiated Cap Cost
This is the final price of the vehicle after any discounts or negotiations. It is equivalent to the purchase price if you were buying the car. To lower your payment, focus on reducing this number first.
2. Residual Value
The residual value is what the leasing company predicts the car will be worth at the end of your lease. If a $40,000 car has a 60% residual value after 36 months, its residual value is $24,000. You are essentially financing the $16,000 difference.
3. Money Factor
The money factor represents the interest rate on a lease. Unlike a standard APR, it is expressed as a small decimal. To convert the Money Factor to a recognizable APR, multiply it by 2400 (e.g., 0.00125 * 2400 = 3%).
- MSRP: $30,000
- Down Payment: $2,000
- Term: 36 Months
- Residual (55%): $16,500
- Money Factor (0.0015): 3.6% APR
In this scenario, your monthly depreciation would be approximately $319, and your rent charge would be $66, leading to a base payment of $385 (before taxes).
4. Lease Calculation Formula
The math behind a lease consists of three main parts:
- Monthly Depreciation: (Cap Cost – Residual Value) / Term
- Monthly Rent Charge: (Cap Cost + Residual Value) × Money Factor
- Total Payment: (Depreciation + Rent Charge) × (1 + Sales Tax Rate)