Calculate your precise monthly car 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 Car Lease Payments are Calculated
Unlike a standard car loan, a lease payment is comprised of three primary parts: depreciation, the rent charge (interest), and taxes. Understanding these components can help you negotiate a better deal at the dealership.
The Lease Formula Components
Capitalized Cost: This is the "selling price" of the vehicle. Always negotiate the sales price just as if you were buying the car; never lease based on MSRP alone.
Residual Value: This is what the leasing company predicts the car will be worth at the end of your term. A higher residual value actually results in a lower monthly payment because you are paying for less depreciation.
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 0.00125 equals a 3% APR.
Example Calculation
Suppose you lease a luxury sedan with an MSRP of $50,000 but negotiate it down to $47,000. If the residual value is 60% after 36 months, the residual amount is $30,000. You are essentially paying for the $17,000 difference (the depreciation) over the 3-year period, plus interest and taxes.
Tips for a Better Lease Deal
To keep your payments low, look for vehicles with high residual values and manufacturer-subsidized "special" money factors. Additionally, putting money down (Capitalized Cost Reduction) lowers the monthly payment but carries risk; if the car is totaled or stolen early in the lease, you may not get that down payment back from insurance.
function calculateLease() {
var msrp = parseFloat(document.getElementById('msrp').value);
var salePrice = parseFloat(document.getElementById('salePrice').value);
var downPayment = parseFloat(document.getElementById('downPayment').value);
var tradeIn = parseFloat(document.getElementById('tradeIn').value);
var term = parseInt(document.getElementById('leaseTerm').value);
var residualRate = parseFloat(document.getElementById('residualRate').value);
var moneyFactor = parseFloat(document.getElementById('moneyFactor').value);
var taxRate = parseFloat(document.getElementById('taxRate').value);
if (isNaN(msrp) || isNaN(salePrice) || isNaN(term) || term <= 0) {
alert("Please enter valid numeric values.");
return;
}
// 1. Adjusted Capitalized Cost
var capCost = salePrice – downPayment – tradeIn;
// 2. Residual Value
var residualValue = msrp * (residualRate / 100);
// 3. Monthly Depreciation
var monthlyDepreciation = (capCost – residualValue) / term;
if (monthlyDepreciation < 0) monthlyDepreciation = 0;
// 4. Monthly Rent Charge
// Formula: (Adjusted Cap Cost + Residual Value) * Money Factor
var monthlyRent = (capCost + residualValue) * moneyFactor;
// 5. Base Payment
var basePayment = monthlyDepreciation + monthlyRent;
// 6. Tax (Usually applied to monthly payment in most states)
var monthlyTax = basePayment * (taxRate / 100);
// 7. Final Total
var totalMonthly = basePayment + monthlyTax;
// Display Results
document.getElementById('resCapCost').innerText = "$" + capCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resResidual').innerText = "$" + residualValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resDepreciation').innerText = "$" + monthlyDepreciation.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resRent').innerText = "$" + monthlyRent.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resTotal').innerText = "$" + totalMonthly.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('leaseResult').style.display = 'block';
}