Car Lease Payment Calculator
Estimate your monthly car lease payments by entering the vehicle details below.
How Car Lease Payments are Calculated
Unlike a traditional car loan where you pay for the entire value of the vehicle, a lease payment is primarily based on the vehicle's depreciation during the time you drive it. To understand your monthly payment, you need to look at three main components:
- Depreciation Fee: This is the value the car loses over the lease term. It is calculated as: (Adjusted Capitalized Cost – Residual Value) ÷ Term Months.
- Rent Charge (Money Factor): This is essentially the interest you pay for the leasing company's money. It is calculated as: (Adjusted Capitalized Cost + Residual Value) × Money Factor.
- Taxes: Most states apply sales tax to the monthly payment rather than the total price of the car.
Key Leasing Terms You Should Know
Gross Capitalized Cost
This is the starting price of the vehicle used for the lease. It includes the negotiated price of the car plus any added fees, service contracts, or prior lease balances you are rolling into the new deal.
Residual Value
The residual value is the estimated worth of the car at the end of the lease term. This is set by the leasing company (the captive finance arm of the manufacturer) and is non-negotiable. A higher residual value usually results in a lower monthly payment because you are paying for less depreciation.
Money Factor
The Money Factor represents the interest rate on a lease. It is often written as a small decimal (e.g., 0.00125). To convert a Money Factor into a standard APR, multiply it by 2400. Conversely, to find the Money Factor from an APR, divide the APR by 2400.
Example Calculation
Imagine you lease a car with a negotiated price of $30,000. You put $2,000 down. The 36-month residual is 60% ($18,000). The Money Factor is 0.0015 (3.6% APR).
- Depreciation: ($28,000 – $18,000) / 36 = $277.77
- Rent Charge: ($28,000 + $18,000) * 0.0015 = $69.00
- Base Payment: $277.77 + $69.00 = $346.77 (plus taxes)