Estimate your monthly lease payments including depreciation and rent charges.
Your Estimated Monthly Payment
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Understanding How Car Lease Payments are Calculated
Leasing a car is often more complex than a standard auto loan because you aren't paying for the entire value of the vehicle. Instead, you are paying for the depreciation that occurs during the time you drive it, plus interest and fees.
The Core Components of a Lease
Gross Capitalized Cost: This is the negotiated price of the vehicle. It is the starting point for all calculations.
Capitalized Cost Reductions: This includes your down payment, trade-in equity, and any manufacturer rebates that reduce the amount being financed.
Residual Value: This is the estimated value of the car at the end of the lease term. It is usually expressed as a percentage of the MSRP. A higher residual value results in lower monthly payments.
Money Factor: This is essentially the interest rate on the lease. To convert a money factor to a standard APR (Annual Percentage Rate), multiply it by 2,400. For example, a money factor of 0.00125 is equal to a 3% APR.
Practical Example
Imagine you are leasing a SUV with an MSRP of $40,000. The dealer offers a 36-month lease with a 60% residual value and a money factor of 0.0015. You put $2,000 down.
Rent Charge: ($38,000 + $24,000) x 0.0015 = $93.00/month
Total Payment: $388.89 + $93.00 = $481.89/month
Why Use a Lease Calculator?
Using a car lease calculator allows you to experiment with different down payments and terms before stepping into the dealership. It helps you verify if the monthly payment the finance manager quotes you matches the math. By adjusting the "Money Factor" and "Residual Value," you can see exactly how much leverage you have during negotiations.
Pro Tip: Negotiate the Price First
One of the biggest mistakes lessees make is negotiating the monthly payment. Always negotiate the Cap Cost (the sales price) first. The lower the sales price, the lower your depreciation payment will be, regardless of the interest rate or residual value set by the bank.
function calculateLease() {
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 = parseInt(document.getElementById("leaseTerm").value);
var residualPercent = parseFloat(document.getElementById("residualValue").value);
var moneyFactor = parseFloat(document.getElementById("moneyFactor").value);
if (isNaN(msrp) || isNaN(term) || isNaN(residualPercent) || isNaN(moneyFactor)) {
alert("Please fill in all required fields with valid numbers.");
return;
}
// 1. Calculate Residual Value in Dollars
var residualValue = msrp * (residualPercent / 100);
// 2. Adjusted Capitalized Cost
var adjustedCapCost = msrp – downPayment – tradeIn;
if (adjustedCapCost < residualValue) {
alert("The Adjusted Capitalized Cost cannot be less than the Residual Value. Please check your down payment or price.");
return;
}
// 3. Monthly Depreciation
var monthlyDepreciation = (adjustedCapCost – residualValue) / term;
// 4. Monthly Rent Charge (Interest)
// Formula: (Adjusted Cap Cost + Residual Value) * Money Factor
var monthlyRentCharge = (adjustedCapCost + residualValue) * moneyFactor;
// 5. Total Monthly Payment
var totalMonthly = monthlyDepreciation + monthlyRentCharge;
// Display Results
document.getElementById("lease-result-area").style.display = "block";
document.getElementById("totalPayment").innerText = "$" + totalMonthly.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("breakdownText").innerHTML =
"Breakdown: Depreciation: $" + monthlyDepreciation.toFixed(2) +
" | Rent Charge: $" + monthlyRentCharge.toFixed(2) +
"(Sales tax not included as it varies by state/region)";
}