Calculate your estimated monthly lease payment based on MSRP, money factor, and residual value.
Lease Summary
Gross Capitalized Cost:
Residual Value:
Monthly Depreciation:
Monthly Rent Charge:
Total Monthly Payment (Inc. Tax):
Understanding Car Lease Calculations
Leasing a vehicle is often more complex than a standard auto loan. Unlike a loan where you pay for the entire value of the car, a lease only requires you to pay for the portion of the vehicle's value that you "use up" during the lease term, plus interest and taxes.
Key Terms Explained
Gross Capitalized Cost: This is the agreed-upon price of the vehicle, plus any additional fees or taxes rolled into the lease.
Residual Value: This is the predicted value of the car at the end of the lease term. It is expressed as a percentage of the MSRP. A higher residual value means lower monthly payments.
Money Factor: This represents the interest rate on a lease. To find the equivalent APR, multiply the money factor by 2400. (e.g., 0.0025 x 2400 = 6% APR).
Cap Cost Reduction: Any amount that reduces the initial cost, such as a down payment, trade-in, or manufacturer rebates.
Real-World Example Calculation
Imagine you are leasing a SUV with an MSRP of $40,000.
Step 2 (Rent Charge): ($35,000 adjusted cap + $24,000 residual) * 0.002 = $118.00 per month.
Total (before tax): $423.56 per month.
How to Get the Best Lease Deal
To minimize your monthly payment, focus on three things: negotiating the lowest possible sales price, choosing a vehicle with a high residual value, and shopping for the lowest money factor. Always check if there are "hidden" fees like acquisition fees or disposition fees that might affect the total cost of the lease.
function calculateLease() {
var msrp = parseFloat(document.getElementById("msrp").value);
var negotiatedPrice = parseFloat(document.getElementById("negotiatedPrice").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var tradeIn = parseFloat(document.getElementById("tradeIn").value);
var term = parseFloat(document.getElementById("leaseTerm").value);
var residualPercent = parseFloat(document.getElementById("residualPercent").value);
var moneyFactor = parseFloat(document.getElementById("moneyFactor").value);
var taxRate = parseFloat(document.getElementById("taxRate").value);
if (isNaN(msrp) || isNaN(negotiatedPrice) || isNaN(term) || term <= 0) {
alert("Please enter valid numbers for the vehicle price and term.");
return;
}
// 1. Calculate Capitalized Cost
var capCostReduction = downPayment + tradeIn;
var adjCapCost = negotiatedPrice – capCostReduction;
// 2. Calculate Residual Value
var residualValue = (msrp * (residualPercent / 100));
// 3. Monthly Depreciation
var monthlyDepreciation = (adjCapCost – residualValue) / term;
if (monthlyDepreciation < 0) monthlyDepreciation = 0;
// 4. Monthly Rent Charge (Interest)
// Formula: (Adjusted Cap Cost + Residual Value) * Money Factor
var monthlyRentCharge = (adjCapCost + residualValue) * moneyFactor;
// 5. Monthly Base Payment
var basePayment = monthlyDepreciation + monthlyRentCharge;
// 6. Tax
var monthlyTax = basePayment * (taxRate / 100);
var totalMonthlyPayment = basePayment + monthlyTax;
// Display Results
document.getElementById("resGrossCap").innerText = "$" + negotiatedPrice.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resResidualVal").innerText = "$" + residualValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resDepreciation").innerText = "$" + monthlyDepreciation.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resRentCharge").innerText = "$" + monthlyRentCharge.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("resTotalPayment").innerText = "$" + totalMonthlyPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("leaseResult").style.display = "block";
}