Car Lease Payment Calculator
Estimate your monthly lease payment based on MSRP, residual value, and money factor.
Estimated Monthly Payment (Pre-Tax): $0.00
Total Monthly Payment (With Tax): $0.00
Total Cost over Lease: $0.00
Total Depreciation: $0.00
How Car Lease Payments are Calculated
Unlike a standard auto loan, a car lease doesn't pay 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. Here is the breakdown of the components used in our calculator:
1. Net Capitalized Cost
This is the "sale price" of the car. It starts with the MSRP or negotiated price, adds acquisition fees, and subtracts your down payment or trade-in value.
2. Residual Value
This is the estimated value of the car at the end of the lease. It is usually expressed as a percentage of the MSRP. For example, a 60% residual on a $40,000 car means the car is expected to be worth $24,000 after the term.
3. Money Factor (Interest)
Lease interest is often expressed as a "Money Factor." To convert an APR to a money factor, divide by 2400. In our calculator, we use the APR for ease of use, but the internal math applies the Money Factor formula: (Net Cap Cost + Residual Value) × Money Factor.
- Vehicle Price: $40,000
- Term: 36 Months
- Residual: 60% ($24,000)
- Down Payment: $3,000
- APR: 4.8% (Money Factor: 0.002)
In this scenario, you are paying for $13,000 of depreciation over 3 years. After adding interest and taxes, your payment would likely land around $450-$500 per month.
Lease vs. Buy: Which is Better?
Leasing is ideal for drivers who want a new car every few years and lower monthly payments. However, you are limited by mileage (usually 10,000 to 15,000 miles per year) and do not build equity in the vehicle. Buying is better for those who keep cars long-term or drive high annual mileages.