My Effective Tax Rate Calculator

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Car Lease Calculator

Calculate your estimated monthly lease payment including taxes and fees.

Gross Capitalized Cost: $0.00
Residual Value: $0.00
Monthly Depreciation: $0.00
Monthly Rent Charge (Interest): $0.00
Total Monthly Payment: $0.00

How Your Monthly Car Lease Payment is Calculated

Understanding car lease math is the best way to ensure you are getting a fair deal at the dealership. Unlike a traditional car loan, where you pay for the entire value of the car, a lease only charges you for the portion of the vehicle's value you "consume" during the lease term, plus interest and taxes.

1. The Capitalized Cost (Cap Cost)

This is the "sale price" of the vehicle. To find your Adjusted Cap Cost, you take the negotiated price of the car plus any mandatory fees (like acquisition fees), then subtract your down payment and trade-in value.

2. Residual Value

The residual value is what the leasing company predicts the car will be worth at the end of your lease. This is usually expressed as a percentage of the MSRP. For example, if a $40,000 car has a 60% residual after 3 years, its residual value is $24,000. You are only paying for the $16,000 difference (the depreciation).

3. Money Factor (The Interest Rate)

The Money Factor is the lease version of an interest rate. To convert a money factor to a standard APR, multiply it by 2400. For example, a money factor of 0.00125 is equivalent to a 3% APR.

Example Calculation

Imagine you lease a car with the following terms:

  • Negotiated Price: $30,000
  • Residual Value: 55% ($16,500)
  • Term: 36 Months
  • Money Factor: 0.0015 (3.6% APR)

The Monthly Depreciation would be ($30,000 – $16,500) / 36 = $375.00.
The Monthly Rent Charge would be ($30,000 + $16,500) * 0.0015 = $69.75.
Base Payment: $444.75 + Sales Tax.

Tips for Getting a Lower Lease Payment

To lower your monthly costs, focus on these three areas:

  • Negotiate the Sale Price: The lower the Cap Cost, the lower the depreciation and rent charges.
  • Check the Residual: Look for cars that hold their value well; higher residual values mean lower monthly payments.
  • Verify the Money Factor: Dealers often "mark up" the money factor provided by the bank. Always ask for the "buy rate" based on your credit score.
function calculateLease() { // Inputs var msrp = parseFloat(document.getElementById('msrp').value) || 0; var residualPercent = parseFloat(document.getElementById('residual').value) || 0; var term = parseInt(document.getElementById('term').value) || 0; var moneyFactor = parseFloat(document.getElementById('moneyFactor').value) || 0; var downPayment = parseFloat(document.getElementById('downPayment').value) || 0; var tradeIn = parseFloat(document.getElementById('tradeIn').value) || 0; var salesTax = parseFloat(document.getElementById('salesTax').value) || 0; var fees = parseFloat(document.getElementById('fees').value) || 0; if (term <= 0 || msrp <= 0) { alert("Please enter valid numbers for price and term."); return; } // Calculations var grossCapCost = msrp + fees; var capCostReduction = downPayment + tradeIn; var adjustedCapCost = grossCapCost – capCostReduction; var residualValue = msrp * (residualPercent / 100); // Depreciation Fee = (Adjusted Cap Cost – Residual) / Term var monthlyDepreciation = (adjustedCapCost – residualValue) / term; if (monthlyDepreciation < 0) monthlyDepreciation = 0; // Rent Charge = (Adjusted Cap Cost + ResidualValue) * Money Factor var monthlyRent = (adjustedCapCost + residualValue) * moneyFactor; var basePayment = monthlyDepreciation + monthlyRent; var taxAmount = basePayment * (salesTax / 100); var totalMonthlyPayment = basePayment + taxAmount; // Display results document.getElementById('resGrossCap').innerText = "$" + grossCapCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resResidualVal').innerText = "$" + residualValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resDepreciation').innerText = "$" + monthlyDepreciation.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resRent').innerText = "$" + monthlyRent.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resTotal').innerText = "$" + totalMonthlyPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('lease-result-box').style.display = 'block'; }

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