This calculator helps you estimate the typical monthly payment for a vehicle lease. Car leasing involves paying for the depreciation of a vehicle over a set period, plus a finance charge and other fees. Unlike buying, you don't own the car at the end of the lease.
Key Lease Terms Explained:
Vehicle MSRP ($): The Manufacturer's Suggested Retail Price of the vehicle. This is the starting point for calculating the car's value over the lease term.
Due at Signing ($): This is the total amount you pay upfront before driving off the lot. It typically includes the first month's payment, a security deposit, any acquisition fees, taxes, and registration fees. Reducing this amount will generally increase your monthly payments.
Residual Value (%): This is the estimated wholesale value of the car at the end of the lease term, expressed as a percentage of the MSRP. A higher residual value means the car is expected to hold its value better, resulting in lower monthly payments.
Lease Term (Months): The duration of the lease agreement, usually between 24 to 48 months. Longer terms can sometimes lead to lower monthly payments, but you'll be paying for the vehicle over a longer period.
Money Factor: This is the interest rate component of your lease. It's typically a small decimal number. To convert it to an approximate Annual Percentage Rate (APR), you multiply the money factor by 2400. For example, a money factor of 0.00125 is equivalent to an APR of 3% (0.00125 * 2400 = 3).
Manufacturer Incentives ($): These are discounts or rebates offered by the manufacturer that can reduce the amount you need to lease. They directly lower the capitalized cost of the vehicle.
How the Monthly Lease Payment is Calculated:
The core components of a monthly lease payment are depreciation and finance charges. Additional fees and taxes are often added.
The calculation generally follows these steps:
Calculate the Depreciation Amount:
Depreciable Base = Vehicle MSRP - Residual Value Amount - Manufacturer Incentives
Residual Value Amount = Vehicle MSRP * (Residual Value % / 100)
Monthly Depreciation = Depreciable Base / Lease Term (Months)
Calculate the Finance Charge (Rent Charge):
Adjusted Cap Cost = Vehicle MSRP - Due at Signing (excluding down payment towards cap cost) - Manufacturer Incentives
Average Capitalized Cost = (Adjusted Cap Cost + Residual Value Amount) / 2
Monthly Finance Charge = Average Capitalized Cost * Money Factor
*Note: Some calculators simplify this by applying the money factor to the Adjusted Cap Cost directly, but the average method is more precise for leases.*
Total Estimated Monthly Payment (before taxes and fees):
Total Monthly Payment = Monthly Depreciation + Monthly Finance Charge
Taxes and other fees (like acquisition fees, disposition fees, and potentially a higher first payment) are typically added to this calculated amount to get your final out-the-door monthly payment.
This calculator provides an estimate. Your actual lease payment may vary based on dealer fees, specific taxes, your credit score, and how the "Due at Signing" amount is applied (e.g., if it includes rolling in fees or a down payment that directly reduces the capitalized cost).
function calculateLeasePayment() {
var vehiclePrice = parseFloat(document.getElementById("vehiclePrice").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var residualValuePercent = parseFloat(document.getElementById("residualValue").value);
var leaseTerm = parseInt(document.getElementById("leaseTerm").value);
var moneyFactor = parseFloat(document.getElementById("moneyFactor").value);
var incentives = parseFloat(document.getElementById("incentives").value);
var resultElement = document.getElementById("monthlyPayment");
resultElement.style.color = "#28a745"; // Reset color
if (isNaN(vehiclePrice) || isNaN(downPayment) || isNaN(residualValuePercent) || isNaN(leaseTerm) || isNaN(moneyFactor) || isNaN(incentives)) {
resultElement.textContent = "Please enter valid numbers.";
resultElement.style.color = "red";
return;
}
if (vehiclePrice <= 0 || leaseTerm <= 0 || moneyFactor <= 0 || residualValuePercent 100) {
resultElement.textContent = "Invalid input values. Check ranges.";
resultElement.style.color = "red";
return;
}
// Calculate Residual Value Amount
var residualValueAmount = vehiclePrice * (residualValuePercent / 100);
// Calculate Depreciable Base
var depreciableBase = vehiclePrice – residualValueAmount – incentives;
// Calculate Monthly Depreciation
var monthlyDepreciation = depreciableBase / leaseTerm;
// Calculate Adjusted Cap Cost (Capitalized Cost)
// Assuming downPayment is applied to reduce the capitalized cost.
// If downPayment included fees, this would need adjustment.
var adjustedCapCost = vehiclePrice – downPayment – incentives;
// Calculate Finance Charge
// More accurate: (Adjusted Cap Cost + Residual Value Amount) / 2 * Money Factor
// Simpler common approximation: Adjusted Cap Cost * Money Factor
var averageCapCost = (adjustedCapCost + residualValueAmount) / 2;
var monthlyFinanceCharge = averageCapCost * moneyFactor;
// Total Estimated Monthly Payment (before taxes and fees)
var totalMonthlyPayment = monthlyDepreciation + monthlyFinanceCharge;
// Format the result
var formattedPayment = "$" + totalMonthlyPayment.toFixed(2);
resultElement.textContent = formattedPayment;
}