Car Lease Calculator

Estimate your monthly lease payments and total cost of ownership.

MSRP ($)

Negotiated Sales Price ($)

Down Payment ($)

Trade-in Allowance ($)

Lease Term (Months) 24 Months 36 Months 48 Months 60 Months

Money Factor (APR / 2400)

Residual Value (%)

Sales Tax (%)

Lease Estimate Summary

Monthly Payment (Excl. Tax) $0.00

Monthly Payment (With Tax) $0.00

Total Lease Cost $0.00

Residual Value:

Depreciation Fee: /mo

Finance Fee (Rent Charge): /mo

How Car Lease Payments are Calculated

Unlike a standard auto loan, where you pay for the entire value of the vehicle plus interest, a lease focuses on the depreciation of the car during the time you drive it. Understanding the math behind your lease agreement can save you thousands of dollars at the dealership.

The Three Components of a Lease Payment

Depreciation Fee: This is the largest portion of your payment. It is calculated by taking the Negotiated Sales Price (Adjusted Capitalized Cost) and subtracting the Residual Value (the value of the car at the end of the lease), then dividing that amount by the number of months in the term.
Finance Fee (Money Factor): This is essentially the interest you pay for the privilege of leasing. The "Money Factor" is expressed as a decimal (e.g., 0.00125). To find the equivalent APR, multiply the money factor by 2,400.
Sales Tax: In most states, sales tax is applied to each monthly payment, though some states require you to pay the tax upfront on the total lease amount.

Key Lease Terminology

Gross Capitalized Cost: The agreed-upon value of the vehicle plus any additional fees or taxes you choose to roll into the lease.
Cap Cost Reductions: Anything that lowers the capitalized cost, such as your down payment, trade-in value, or manufacturer rebates.
Residual Value: A fixed percentage of the original MSRP. This value is set by the leasing company and represents what the car is expected to be worth when you return it.
Money Factor: The lease interest rate. A lower money factor means lower monthly interest charges.

Real-World Example

Imagine you are leasing a car with an MSRP of $35,000. You negotiate the price down to $32,000. You put $2,000 down and get $1,000 for your trade-in. Your Adjusted Cap Cost is $29,000.

If the bank sets the residual value at 60% after 36 months, the car is worth $21,000 ($35,000 x 0.60). You are responsible for $8,000 of depreciation over 36 months, which is $222.22 per month.

Add in the money factor fee and sales tax, and your total payment would likely fall between $350 and $400 per month.

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