Estimate your monthly lease payment using MSRP, money factor, and residual values.
Gross Capitalized Cost:$0.00
Residual Value:$0.00
Monthly Depreciation:$0.00
Monthly Rent Charge:$0.00
Estimated Monthly Payment:$0.00
Understanding How Car Leases Are Calculated
Unlike a traditional auto loan where you pay for the entire vehicle over time, a lease essentially charges you for the depreciation of the car during the period you drive it, plus interest and taxes.
The Key Components of Your Lease
Gross Capitalized Cost: This is the negotiated price of the vehicle. Lowering this price through negotiation is the best way to reduce your payment.
Residual Value: The estimated value of the car at the end of the lease. This is set by the leasing company. A higher residual value means lower monthly payments because you are paying for less depreciation.
Money Factor: This is the interest rate on a lease. To find the equivalent APR, multiply the money factor by 2,400. For example, a .00125 money factor equals a 3% APR.
Lease Term: The duration of the lease, typically 24, 36, or 48 months.
Real-World Example Calculation
Suppose you want to lease a SUV with an MSRP of $40,000. You negotiate the price down to $38,000 and put $2,000 down. Your Capitalized Cost is now $36,000.
If the 36-month residual is 60%, the car will be worth $24,000 at the end ($40,000 * 0.60). You are responsible for $12,000 of depreciation over 36 months, which is $333.33/month. Add in the money factor (rent charge) and taxes to get your final monthly total.
How to Lower Your Lease Payment
Negotiate the Sales Price: Many people don't realize that the "Cap Cost" is negotiable just like a purchase price.
Check for Incentives: Manufacturers often offer "lease cash" or rebates that lower the capitalized cost.
Choose High Residual Cars: Some brands hold their value better than others. A car that retains 65% of its value will be cheaper to lease than one that only retains 50%, even if the MSRP is higher.
function calculateLease() {
// Get Input Values
var msrp = parseFloat(document.getElementById("msrp").value);
var salesPrice = parseFloat(document.getElementById("salesPrice").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var tradeIn = parseFloat(document.getElementById("tradeIn").value);
var leaseTerm = parseFloat(document.getElementById("leaseTerm").value);
var residualPercent = parseFloat(document.getElementById("residualPercent").value);
var moneyFactor = parseFloat(document.getElementById("moneyFactor").value);
var taxRate = parseFloat(document.getElementById("taxRate").value);
// Validation
if (isNaN(msrp) || isNaN(salesPrice) || isNaN(leaseTerm) || leaseTerm <= 0) {
alert("Please enter valid numeric values for all fields.");
return;
}
// 1. Adjusted Capitalized Cost
var capCost = salesPrice – downPayment – tradeIn;
// 2. Residual Value
var residualVal = msrp * (residualPercent / 100);
// 3. Monthly Depreciation Fee
// (Cap Cost – Residual) / Term
var depreciationFee = (capCost – residualVal) / leaseTerm;
if (depreciationFee < 0) depreciationFee = 0;
// 4. Monthly Rent Charge (Interest)
// (Cap Cost + Residual) * Money Factor
var rentCharge = (capCost + residualVal) * moneyFactor;
// 5. Base Monthly Payment
var basePayment = depreciationFee + rentCharge;
// 6. Monthly Tax
var monthlyTax = basePayment * (taxRate / 100);
// 7. Total Payment
var totalMonthly = basePayment + monthlyTax;
// Display Results
document.getElementById("resCapCost").innerText = "$" + capCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resResidualVal").innerText = "$" + residualVal.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resDepreciation").innerText = "$" + depreciationFee.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resRentCharge").innerText = "$" + rentCharge.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resTotal").innerText = "$" + totalMonthly.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resultBox").style.display = "block";
}