Enter APR (e.g., 5.0) or Money Factor (e.g., 0.00208)
Estimated Monthly Payment
$0.00
Total Depreciation Fee:$0.00
Total Rent Charge (Finance):$0.00
Residual Value (Buyout):$0.00
function calculateLease() {
var msrp = parseFloat(document.getElementById('msrp').value);
var downPayment = parseFloat(document.getElementById('downPayment').value) || 0;
var tradeIn = parseFloat(document.getElementById('tradeIn').value) || 0;
var term = parseInt(document.getElementById('term').value);
var residualPercent = parseFloat(document.getElementById('residual').value);
var aprOrMf = parseFloat(document.getElementById('apr').value);
if (isNaN(msrp) || msrp <= 0) {
alert("Please enter a valid MSRP.");
return;
}
// Determine if input is APR or Money Factor
var moneyFactor;
if (aprOrMf < 1) {
moneyFactor = aprOrMf; // Already a money factor
} else {
moneyFactor = aprOrMf / 2400; // Convert APR to Money Factor
}
var residualValue = msrp * (residualPercent / 100);
var capCostReduction = downPayment + tradeIn;
var adjustedCapCost = msrp – capCostReduction;
// 1. Depreciation Fee = (Adjusted Cap Cost – Residual Value) / Term
var depreciationFee = (adjustedCapCost – residualValue) / term;
if (depreciationFee < 0) depreciationFee = 0;
// 2. Finance Fee = (Adjusted Cap Cost + Residual Value) * Money Factor
var financeFee = (adjustedCapCost + residualValue) * moneyFactor;
// 3. Total Monthly Payment
var totalPayment = depreciationFee + financeFee;
// Display results
document.getElementById('monthly-payment').innerText = '$' + totalPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('depreciation-total').innerText = '$' + (depreciationFee * term).toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('finance-total').innerText = '$' + (financeFee * term).toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('residual-total').innerText = '$' + residualValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('results-area').style.display = 'block';
}
How Car Lease Payments are Calculated
Calculating a car lease is different from calculating a standard auto loan. While a loan covers the entire value of the vehicle, a lease only covers the car's depreciation during the time you drive it, plus a finance charge (called the Money Factor).
Key Leasing Terms Explained
MSRP: The Manufacturer's Suggested Retail Price. You can often negotiate this price down before starting the lease calculation.
Residual Value: This is the predicted value of the car at the end of the lease term. Higher residual values lead to lower monthly payments because you are financing less depreciation.
Money Factor: This is essentially the interest rate for the lease. To convert a Money Factor to APR, multiply it by 2,400. For example, a Money Factor of 0.0025 is equivalent to a 6% APR.
Adjusted Capitalized Cost: This is the final price of the vehicle after adding fees and subtracting your down payment or trade-in value.
Practical Leasing Example
Suppose you are leasing a $40,000 SUV for 36 months:
Residual Value: 60% ($24,000)
Down Payment: $2,000
Money Factor: 0.0020 (4.8% APR)
In this scenario, your Adjusted Capitalized Cost is $38,000 ($40,000 – $2,000). Your depreciation fee would be ($38,000 – $24,000) / 36 = $388.89. Your finance fee would be ($38,000 + $24,000) * 0.0020 = $124.00. Your total monthly payment would be $512.89 (plus taxes).
Tips for a Better Lease Deal
To lower your payment, focus on three things: negotiating a lower purchase price (Gross Cap Cost), finding vehicles with high residual values, and qualifying for a lower money factor through a good credit score. Always ask the dealer for the "buy rate" on the money factor to ensure they aren't adding hidden markups to the interest rate.