Car Lease Calculator
Calculate a car lease payment from price, residual value and money factor, split into depreciation, finance charge and tax, with the total cost of the lease.
Car Lease Calculator: with the default inputs, monthly payment is $506.41.
Sticker price. Residual value is a percentage of this.
The agreed selling price — the gross capitalized cost.
Set by the leasing company; ask for it. Typically 50–65% at 36 months.
Used when the rate is given as a money factor. Multiply by 2,400 to get the APR.
Used when the rate is given as an APR. Divide by 2,400 to get the money factor.
Cash or trade-in credit that lowers the amount being leased.
Acquisition fee, doc fee, registration. Often $600–$1,200 combined; enter 0 if they're rolled into the price.
Depreciation + finance charge (+ tax when it's charged monthly).
- Depreciation fee / mo
- $327.78
- Finance fee / mo
- $145.50
- Sales tax / mo
- $33.13
- Total cost of the lease
- $20,231All payments + down payment + fees + any upfront tax.
- Due at signing
- $2,506
- Equivalent APR
- 6%
- Residual value
- $23,200
- Adjusted capitalized cost
- $35,000
Assumptions
- Standard closed-end lease formula: depreciation on the adjusted cap cost minus residual, finance charge on (cap cost + residual) × money factor.
- Fees are paid at signing and not capitalized; the first monthly payment is collected at signing.
- Sales tax is applied per the option chosen; mileage overage, disposition and purchase-option fees are not included.
- Depreciation$11,80065%
- Finance charge$5,23829%
- Sales tax$1,1937%
| Money factor | APR | Finance fee / mo on this deal |
|---|---|---|
| 0.001 | 2.4% | $58.20 |
| 0.0015 | 3.6% | $87.30 |
| 0.002 | 4.8% | $116.40 |
| 0.0025 | 6% | $145.50 |
| 0.003 | 7.2% | $174.60 |
| 0.004 | 9.6% | $232.80 |
How this is worked out
The formula
Depreciation fee = (adjusted cap cost − residual) ÷ term Finance fee = (adjusted cap cost + residual) × money factor Payment = depreciation + finance (+ sales tax) Adjusted cap cost = negotiated price − down payment (cap cost reduction) Residual = MSRP × residual % APR ≈ money factor × 2,400
Open How it’s calculated above to see this worked through with your own numbers.
What you enter
- MSRP
- Sticker price. Residual value is a percentage of this.in dollars · 0 or more · defaults to 40000
- Negotiated price
- The agreed selling price — the gross capitalized cost.in dollars · 0 or more · defaults to 37000
- Residual value
- Set by the leasing company; ask for it. Typically 50–65% at 36 months.a percentage · from 0 to 100 · defaults to 58
- Lease term
- A number.from 1 to 72 · whole numbers only · defaults to 36
- Finance rate given as
- Choose one of 2 options.Money factor (e.g. 0.0025) · APR (e.g. 6%)
- Money factor
- Used when the rate is given as a money factor. Multiply by 2,400 to get the APR.from 0 to 0.05 · defaults to 0.0025
- APR
- Used when the rate is given as an APR. Divide by 2,400 to get the money factor.a percentage · from 0 to 100 · defaults to 6
- Down payment (cap cost reduction)
- Cash or trade-in credit that lowers the amount being leased.in dollars · 0 or more · defaults to 2000
- Acquisition & other fees paid at signing
- Acquisition fee, doc fee, registration. Often $600–$1,200 combined; enter 0 if they're rolled into the price.in dollars · 0 or more · defaults to 0
- Sales tax
- A number.a percentage · from 0 to 20 · defaults to 7
- Tax is charged on
- Choose one of 3 options.Each monthly payment (most states) · Total of all payments, paid at signing (e.g. New York) · Full vehicle price, paid at signing (e.g. Texas)
What you get back
- Monthly paymentmain answer
- Depreciation + finance charge (+ tax when it's charged monthly).
- Depreciation fee / mo
- Finance fee / mo
- Sales tax / mo
- Total cost of the lease
- All payments + down payment + fees + any upfront tax.
- Due at signing
- Equivalent APR
- Residual value
- Adjusted capitalized cost
What this assumes
- Standard closed-end lease formula: depreciation on the adjusted cap cost minus residual, finance charge on (cap cost + residual) × money factor.
- Fees are paid at signing and not capitalized; the first monthly payment is collected at signing.
- Sales tax is applied per the option chosen; mileage overage, disposition and purchase-option fees are not included.
About this calculator
A lease payment has two moving parts. You pay for the depreciation — the difference between what the car is worth now (the capitalized cost) and what the leasing company expects it to be worth at the end (the residual) — spread over the term. And you pay a finance charge on the money tied up in the car, expressed as a money factor rather than an interest rate. Everything a dealer can adjust — price, residual, money factor, down payment — flows through those two lines, so seeing them separately is how you spot a bad deal.
How to use it
Enter the MSRP and the price you've negotiated (negotiate a lease like a purchase — the selling price is the biggest lever). Ask the dealer for the residual percentage and the money factor; both are set by the leasing company for that model and term, and the dealer can mark up the money factor. If they quote an APR instead, switch the selector. Add any cap cost reduction (cash down or trade-in) and the fees due at signing. Under Tax, pick how your state taxes leases — most tax each payment, a few tax the whole thing up front.
Reading the results
- Depreciation fee is usually two-thirds or more of the payment. A higher residual or lower price both shrink it.
- Finance fee is what the money factor costs you. Convert it: money factor × 2,400 = APR. 0.0025 is 6%; anything above about 0.004 (9.6%) deserves a second quote.
- Total cost of the lease is the number to compare against buying — it's everything you'll hand over for three years of driving, with no car at the end.
- Due at signing includes the first payment, which is normally collected up front.
Money factor math
The finance fee is (cap cost + residual) × money factor. That sum is roughly twice the average balance you owe over the term, which is why the money factor is about APR ÷ 24 per month, i.e. APR ÷ 2,400.
Things dealers don't volunteer
- Residuals are set on MSRP, so paying over sticker is pure loss.
- Rebates and incentives can be applied as cap cost reductions — ask.
- A big down payment lowers the monthly figure but is lost if the car is totaled; GAP coverage is usually included in leases, but your cash isn't refunded.
- Mileage allowances (10–15k/yr) and excess-mileage charges (often $0.15–0.30/mile) and the disposition fee at turn-in aren't in this payment.
Frequently asked questions
▸How do I convert a money factor to APR?
Multiply by 2,400. A money factor of 0.0025 is a 6% APR; 0.00125 is 3%. To go the other way, divide the APR by 2,400.
▸What is residual value and who sets it?
The leasing company's forecast of the car's value at lease end, stated as a percentage of MSRP. It's fixed for a given model, term and mileage allowance — you can't negotiate it, but a higher residual means a lower payment, so it's worth comparing models.
▸Should I put money down on a lease?
Generally as little as possible. Cap cost reduction lowers the payment but the cash is gone if the car is totaled or stolen early, and you're prepaying depreciation on a car you won't own. Pay fees and the first payment, then keep the rest.
▸Why is sales tax handled differently on leases?
Most states tax only the monthly payments, because you're paying for use rather than the whole car. A few — New York taxes the total of payments up front, Texas taxes the full price — collect it at signing. Check your state's rule and pick the matching option.
▸Is leasing cheaper than buying?
Per month, usually yes; over time, usually no, because you never stop paying for depreciation on a new car. Leasing tends to win if you keep cars only three years, drive under the allowance, and value warranty coverage; buying wins if you keep cars longer.
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