Monthly Depreciation:$0.00Monthly Finance Charge:$0.00Monthly Sales Tax:$0.00Total Cost of Lease:$0.00
function calculateCarLease() {
var msrp = parseFloat(document.getElementById('msrp').value);
var downPayment = parseFloat(document.getElementById('downPayment').value) || 0;
var term = parseInt(document.getElementById('leaseTerm').value);
var resPerc = parseFloat(document.getElementById('residualPerc').value);
var mf = parseFloat(document.getElementById('moneyFactor').value);
var taxRate = parseFloat(document.getElementById('salesTax').value) || 0;
if (isNaN(msrp) || isNaN(resPerc) || isNaN(mf) || msrp <= 0) {
alert("Please enter valid numbers for Vehicle Price, Residual Value, and Money Factor.");
return;
}
// 1. Calculate Residual Value Amount
var residualAmount = msrp * (resPerc / 100);
// 2. Calculate Capitalized Cost
var capCost = msrp – downPayment;
// 3. Monthly Depreciation = (Cap Cost – Residual) / Term
var monthlyDepreciation = (capCost – residualAmount) / term;
if (monthlyDepreciation < 0) monthlyDepreciation = 0;
// 4. Monthly Finance Charge (Rent Charge) = (Cap Cost + Residual) * Money Factor
var monthlyFinance = (capCost + residualAmount) * mf;
// 5. Base Payment
var basePayment = monthlyDepreciation + monthlyFinance;
// 6. Tax
var monthlyTax = basePayment * (taxRate / 100);
// 7. Total Monthly Payment
var totalMonthly = basePayment + monthlyTax;
// 8. Total Cost of Lease over the term
var totalLease = (totalMonthly * term) + downPayment;
// Display Results
document.getElementById('monthlyTotal').innerText = "$" + totalMonthly.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('depreciationVal').innerText = "$" + monthlyDepreciation.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('financeVal').innerText = "$" + monthlyFinance.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('taxVal').innerText = "$" + monthlyTax.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalLeaseCost').innerText = "$" + totalLease.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('leaseResult').style.display = 'block';
}
How Does Car Leasing Work?
Unlike a traditional car loan where you pay for the entire value of the vehicle, a car lease allows you to pay only for the portion of the vehicle's value that you "use" during the lease term. This is why lease payments are typically much lower than monthly financing payments.
Key Components of a Lease Calculation
To use our car lease calculator effectively, it is important to understand the four main variables that determine your monthly payment:
Gross Capitalized Cost: This is the negotiated price of the vehicle plus any additional fees or taxes rolled into the lease.
Residual Value: This is the estimated value of the car at the end of the lease term. It is set by the leasing company and expressed as a percentage of the original MSRP. A higher residual value results in lower monthly payments.
Money Factor: This is essentially the interest rate for your lease. To convert a Money Factor to an APR (Annual Percentage Rate), multiply it by 2,400. For example, a money factor of 0.00125 is equivalent to a 3% interest rate.
Lease Term: The duration of the lease, usually 24, 36, or 48 months.
A Realistic Example
Let's look at a typical scenario for a mid-sized SUV:
Vehicle Price: $40,000
Down Payment: $2,000
Term: 36 Months
Residual Value: 60% ($24,000)
Money Factor: 0.0015 (3.6% APR)
Sales Tax: 8%
In this example, your Monthly Depreciation would be approximately $388.89, your Rent Charge (Interest) would be $93.00, and after adding taxes, your total monthly payment would be roughly $520.44.
Tips for Getting a Better Lease Deal
1. Negotiate the Price: Even though you are leasing, you can still negotiate the capitalized cost (the vehicle price). The lower the starting price, the lower your monthly depreciation charge.
2. Look for High Residuals: Cars that hold their value well (like certain luxury SUVs or Japanese sedans) often have higher residual values, which can lead to surprisingly affordable lease payments compared to cheaper cars that depreciate quickly.
3. Watch the Fees: Be aware of "acquisition fees" at the start and "disposition fees" at the end of the lease. These are often non-negotiable but should be factored into your total cost of ownership.