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Professional Car Lease Calculator

Estimate your monthly lease payment using MSRP, Money Factor, and Residual Values.

How Car Lease Payments Are Calculated

Unlike a standard auto loan where you pay for the entire value of the vehicle, a car lease only charges you for the depreciation of the car during the time you drive it, plus interest and taxes. To use this car lease calculator effectively, you need to understand the four main pillars of lease math.

1. Net Capitalized Cost

This is the actual amount being financed. It starts with the Negotiated Sales Price (which should always be lower than the MSRP). From this price, you subtract your Down Payment and any Trade-in Value. The lower your Net Capitalized Cost, the lower your monthly payment will be.

2. Residual Value

The Residual Value is what the leasing company predicts the car will be worth at the end of your lease. It is expressed as a percentage of the original MSRP.

• High Residual: Better for leasing (you pay for less depreciation).
• Low Residual: Worse for leasing (the car loses value quickly).

For example, on a $40,000 car with a 60% residual after 3 years, the car is expected to be worth $24,000. You are responsible for the $16,000 difference.

3. Money Factor (Interest Rate)

The Money Factor represents the interest rate on a lease. It is written as a small decimal (e.g., 0.00125). To convert this to a traditional APR, multiply the Money Factor by 2400.

Pro Tip: A Money Factor of 0.0015 is roughly equal to 3.6% APR (0.0015 x 2400).

4. The Monthly Depreciation & Rent Charge

Your payment is split into two main parts:

• Depreciation: (Net Cap Cost – Residual Value) / Lease Term
• Rent Charge: (Net Cap Cost + Residual Value) * Money Factor

Finally, the Sales Tax is applied to these totals to reach your final "out-the-door" monthly payment.

Real-World Lease Example

Imagine you are leasing a SUV with an MSRP of $35,000. You negotiate the price down to $33,000. You put $2,000 down and have no trade-in. The lease is for 36 months, the residual is 58%, and the Money Factor is 0.0015 with a 7% tax rate.

• Net Cap Cost: $33,000 – $2,000 = $31,000
• Residual Value: $35,000 * 0.58 = $20,300
• Monthly Depreciation: ($31,000 – $20,300) / 36 = $297.22
• Monthly Rent Charge: ($31,000 + $20,300) * 0.0015 = $76.95
• Base Payment: $297.22 + $76.95 = $374.17
• Total with Tax (7%): $400.36

3 Tips to Lower Your Lease Payment

1. Negotiate the Sales Price: Many people think lease prices are fixed. They aren't. Always negotiate the "Capitalized Cost" just as you would if you were buying the car cash.
2. Check for Incentives: Manufacturers often offer "Lease Cash" or rebates that can be applied to your down payment, further reducing the cap cost.
3. Watch the Mileage: Higher mileage limits (like 15,000 miles/year) will lower the residual value, which increases your monthly payment. Only pay for the miles you actually need.