function calculateLease() {
var msrp = parseFloat(document.getElementById('msrp').value);
var negotiatedPrice = parseFloat(document.getElementById('negotiatedPrice').value);
var downPayment = parseFloat(document.getElementById('downPayment').value);
var tradeIn = parseFloat(document.getElementById('tradeIn').value);
var residualPercent = parseFloat(document.getElementById('residualPercent').value);
var leaseTerm = parseFloat(document.getElementById('leaseTerm').value);
var moneyFactor = parseFloat(document.getElementById('moneyFactor').value);
var salesTax = parseFloat(document.getElementById('salesTax').value);
if (isNaN(msrp) || isNaN(negotiatedPrice) || isNaN(leaseTerm)) {
alert("Please enter valid numbers for price and term.");
return;
}
// 1. Calculate Gross Cap Cost
var grossCapCost = negotiatedPrice;
// 2. Cap Cost Reduction
var capCostReduction = downPayment + tradeIn;
// 3. Adjusted Cap Cost
var adjustedCapCost = grossCapCost – capCostReduction;
// 4. Residual Value
var residualValue = msrp * (residualPercent / 100);
// 5. Monthly Depreciation
var monthlyDepreciation = (adjustedCapCost – residualValue) / leaseTerm;
// 6. Monthly Rent Charge
var monthlyRentCharge = (adjustedCapCost + residualValue) * moneyFactor;
// 7. Base Payment
var basePayment = monthlyDepreciation + monthlyRentCharge;
// 8. Tax
var monthlyTax = basePayment * (salesTax / 100);
// 9. Total Payment
var totalMonthlyPayment = basePayment + monthlyTax;
// Update UI
document.getElementById('monthlyTotal').innerText = "$" + totalMonthlyPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('depreciationPart').innerText = "$" + monthlyDepreciation.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('rentPart').innerText = "$" + monthlyRentCharge.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('taxPart').innerText = "$" + monthlyTax.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('capCostTotal').innerText = "$" + adjustedCapCost.toLocaleString();
document.getElementById('residualDollar').innerText = "$" + residualValue.toLocaleString();
document.getElementById('leaseResult').style.display = 'block';
}
Understanding Your Car Lease Payment
Leasing a car can be more complex than a traditional auto loan. Instead of paying for the entire value of the vehicle, you are essentially paying for the depreciation that occurs during the period you drive it, plus interest and taxes.
Key Lease Terms Explained
MSRP: The Manufacturer's Suggested Retail Price. This is used to calculate the residual value.
Adjusted Capitalized Cost: This is the "loan amount" of the lease. It is the negotiated price minus any down payment or trade-in credit.
Residual Value: The estimated value of the car at the end of the lease. A higher residual value usually leads to a lower monthly payment because you are financing less depreciation.
Money Factor: This is the interest rate of the lease. To convert a money factor to a standard APR, multiply it by 2,400. (e.g., 0.00125 * 2400 = 3% APR).
Lease Term: The duration of the lease, typically 24, 36, or 48 months.
How to Get a Better Lease Deal
To lower your monthly payment, focus on these three areas:
Negotiate the Purchase Price: Many people don't realize you can negotiate the "Capitalized Cost" just like you would when buying a car.
Check for Incentives: Manufacturers often offer "lease specials" where they artificially inflate the residual value or lower the money factor to move inventory.
Limit the Down Payment: While a down payment (cap cost reduction) lowers your monthly bill, if the car is totaled or stolen shortly after you leave the lot, that money is often lost. Most experts recommend putting as little money down as possible on a lease.
Calculation Example
Imagine a car with an MSRP of $40,000. You negotiate the price to $38,000 and put $2,000 down. Your Adjusted Cap Cost is $36,000. If the residual value is 60% ($24,000) for a 36-month lease: