Car Lease Calculator
Estimate your monthly car lease payment based on price, money factor, and residual value.
(Interest Rate / 2400)
Estimated Monthly Payment
$0.00
Depreciation: $0.00
Rent Charge: $0.00
Understanding Your Car Lease Payment
Leasing a car is different from buying because you are essentially paying for the vehicle's depreciation during the time you drive it, rather than the total value of the car. Using a lease calculator helps you understand where every dollar goes, from the money factor to the residual value.
Key Lease Components Explained
- Gross Capitalized Cost: This is the agreed-upon price of the vehicle, plus any fees or taxes rolled into the lease.
- Capitalized Cost Reduction: This is your down payment, trade-in credit, or manufacturer rebates that lower the amount being financed.
- Residual Value: This is what the car is expected to be worth at the end of the lease. High residual values usually result in lower monthly payments.
- Money Factor: This is the lease version of an interest rate. To convert the money factor to an APR, multiply it by 2400.
How the Lease is Calculated
A lease payment consists of two main parts: the Depreciation Fee and the Finance Fee (Rent Charge).
1. Depreciation Fee: (Net Cap Cost – Residual Value) / Lease Term
2. Rent Charge: (Net Cap Cost + Residual Value) × Money Factor
Finally, sales tax is applied to the sum of these two figures to reach your total monthly payment.
Example Calculation
If you lease a car for $40,000 with a 60% residual ($24,000) over 36 months, you are paying for $16,000 of depreciation. Divided by 36, your base depreciation is $444.44. Adding the rent charge based on your credit score (money factor) and local sales tax will determine the final check you write every month.