Online Resources for Calculating Vehicle Loan Rates

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Car Lease Monthly Payment Calculator

APR รท 2400

Estimated Monthly Payment

$0.00
Depreciation/Mo $0.00
Rent Charge/Mo $0.00
Sales Tax/Mo $0.00
function calculateLease() { var price = parseFloat(document.getElementById('vehiclePrice').value); var down = parseFloat(document.getElementById('downPayment').value); var trade = parseFloat(document.getElementById('tradeIn').value); var residualPct = parseFloat(document.getElementById('residualPercent').value); var term = parseFloat(document.getElementById('leaseTerm').value); var mf = parseFloat(document.getElementById('moneyFactor').value); var tax = parseFloat(document.getElementById('salesTax').value); if (isNaN(price) || isNaN(term) || term <= 0) { alert("Please enter valid vehicle price and lease term."); return; } // 1. Gross Capitalized Cost (assuming no extra fees for simplicity) var capCost = price; // 2. Net Capitalized Cost var netCapCost = capCost – down – trade; // 3. Residual Value var residualValue = price * (residualPct / 100); // 4. Monthly Depreciation var monthlyDepreciation = (netCapCost – residualValue) / term; if (monthlyDepreciation < 0) monthlyDepreciation = 0; // 5. Monthly Rent Charge (Finance Fee) var monthlyRentCharge = (netCapCost + residualValue) * mf; // 6. Base Monthly Payment var basePayment = monthlyDepreciation + monthlyRentCharge; // 7. Monthly Tax var monthlyTax = basePayment * (tax / 100); // 8. Total Monthly Payment var totalMonthly = basePayment + monthlyTax; // Display Results document.getElementById('monthlyTotal').innerText = "$" + totalMonthly.toFixed(2); document.getElementById('depreciationPart').innerText = "$" + monthlyDepreciation.toFixed(2); document.getElementById('interestPart').innerText = "$" + monthlyRentCharge.toFixed(2); document.getElementById('taxPart').innerText = "$" + monthlyTax.toFixed(2); document.getElementById('leaseResult').style.display = 'block'; }

How Car Lease Payments are Calculated

A car lease payment is fundamentally different from a traditional car loan. Instead of paying for the entire value of the vehicle, you are essentially paying for the depreciation of the car over the period you use it, plus interest and taxes.

The Three Pillars of a Lease Payment

  1. Depreciation Fee: This is the largest part of your payment. It represents the value the car loses during your lease. It is calculated by taking the Net Capitalized Cost (the price you negotiated minus your down payment) and subtracting the Residual Value (what the car is worth at the end), then dividing that by the number of months.
  2. Rent Charge (Money Factor): This is the interest you pay to the leasing company. Because the leasing company is "carrying" the value of the car while you use it, they charge a fee based on the sum of the Net Cap Cost and the Residual Value multiplied by the Money Factor.
  3. Sales Tax: Unlike a purchase where you might pay tax on the full price upfront, most states only charge sales tax on the monthly lease payment itself.

Important Terms to Know

  • Money Factor: This is the lease version of an APR. To convert a money factor to a standard interest rate, multiply it by 2400. For example, a money factor of 0.0025 is equivalent to a 6% APR.
  • Residual Value: This is the predicted value of the car at the end of the lease term, set by the bank. High residual values lead to lower monthly payments because you are paying for less depreciation.
  • Cap Cost Reduction: This is any amount that reduces the initial price of the car, such as a cash down payment, a trade-in, or manufacturer rebates.

Example Calculation

Imagine you lease a car worth $40,000. The residual value after 3 years (36 months) is 60% ($24,000). You put $2,000 down. Your money factor is 0.0020 (4.8% APR).

– Net Cap Cost: $38,000 ($40k – $2k down)
– Total Depreciation: $14,000 ($38,000 – $24,000)
– Monthly Depreciation: $388.89 ($14,000 / 36)
– Monthly Rent Charge: $124.00 (($38,000 + $24,000) * 0.0020)
– Base Payment: $512.89
– Total with 7% Tax: $548.79

Expert SEO Tip: Always check if there are "acquisition fees" or "disposition fees" hidden in your lease contract. While our calculator focuses on the monthly payment, these "drive-off" costs can significantly impact your total cost of ownership.

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