Car Lease Payment Calculator
Estimate your monthly car lease payments with precision.
How to Use the Car Lease Calculator
Leasing a car can be complex because of the unique terminology used by dealerships. This calculator breaks down the math into easy-to-understand components. To get an accurate estimate, you will need the MSRP of the vehicle, the price you actually negotiated, the residual percentage (how much the car is worth at the end of the lease), and the money factor.
Understanding Key Lease Terms
- MSRP: The Manufacturer's Suggested Retail Price. This is used to calculate the residual value.
- Gross Capitalized Cost: This is the negotiated price of the vehicle before any down payments or trade-ins are applied.
- Money Factor: This is essentially the interest rate on the lease. To convert an APR to a money factor, divide the APR by 2400. For example, a 3% APR is a 0.00125 money factor.
- Residual Value: The estimated value of the car at the end of the lease. A higher residual value usually means lower monthly payments.
The Car Lease Formula Explained
The monthly payment consists of two main parts: the Depreciation Fee and the Finance Fee (Rent Charge).
1. Depreciation Fee: (Adjusted Cap Cost – Residual Value) / Term in Months
2. Rent Charge: (Adjusted Cap Cost + Residual Value) × Money Factor
The sum of these two figures, plus any applicable local sales tax, equals your total monthly payment.
Example Calculation
Imagine you are leasing a car with an MSRP of $40,000. You negotiate the price down to $38,000 and put $3,000 down. The residual value is 60% ($24,000) for a 36-month term with a money factor of 0.0015.
- Adjusted Cap Cost: $38,000 – $3,000 = $35,000
- Monthly Depreciation: ($35,000 – $24,000) / 36 = $305.56
- Monthly Rent Charge: ($35,000 + $24,000) × 0.0015 = $88.50
- Base Payment: $394.06 (before taxes)
Tips for Getting a Better Lease Deal
Always negotiate the sales price (Cap Cost) just as if you were buying the car. Many people make the mistake of only negotiating the monthly payment. Additionally, try to avoid "gap insurance" markups if your insurance policy already covers it, and always verify the money factor to ensure the dealer isn't marking up the interest rate provided by the lender.