Estimate your monthly car lease payment based on the vehicle price, down payment, residual value, lease term, APR and sales tax.
Google AdSense Banner
This area will contain advertisements after approval.
Google AdSense Banner
This area will contain advertisements after approval.
A lease payment has two core parts: a depreciation fee, which spreads the loss in value (adjusted capitalized cost minus residual value) evenly over the lease term, and a finance fee (sometimes called a rent charge), which is calculated using a money factor applied to the sum of the adjusted capitalized cost and residual value. Sales tax, where applicable, is then applied to the base payment.
This calculator converts the APR you enter into an equivalent money factor using the standard approximation: money factor = APR ÷ 2400, since money factors (small decimals like 0.00125) are less intuitive to reason about directly than a familiar interest rate.
Residual value is the vehicle's estimated worth at the end of the lease, set by the leasing company based on expected depreciation. A higher residual value means less depreciation to pay for over the lease, generally resulting in a lower monthly payment, though it also means a higher price if you choose to buy the vehicle at lease end.
A $35,000 vehicle, no down payment, an $18,000 residual value, a 36-month term, 5% APR, and no sales tax: monthly depreciation fee = ($35,000 − $18,000) ÷ 36 = $472.22. The 5% APR converts to a money factor of 5 ÷ 2400 = 0.002083, giving a monthly finance fee of ($35,000 + $18,000) × 0.002083 = $110.42. The base payment is $472.22 + $110.42 = $582.64, and with no sales tax, the total monthly payment is also $582.64, for a total lease cost of $20,975 over the 36-month term.
Comparing lease offers by monthly payment alone without checking the money factor and residual value, two leases with identical payments can have very different total costs depending on term length and cap cost reduction.
Rolling a large down payment into a lease to lower the monthly payment, if the vehicle is totaled or the lease ends early, that upfront money is generally not recoverable the way it would be with a loan down payment building equity.
Ignoring mileage limits and excess-wear charges when comparing a lease to buying, these fees can add substantially to the total lease cost beyond what this calculator estimates.
A money factor is the lease equivalent of an interest rate, expressed as a small decimal (like 0.00125) rather than a percentage. Multiplying a money factor by 2400 gives you the approximate equivalent APR, and this calculator does that conversion in reverse from the APR you enter.
It varies by location. Many US states tax each monthly lease payment as it's made, which is what this calculator assumes, while others tax the full vehicle price upfront. Check your local rules if you want a fully precise figure.
A lower residual value means the vehicle is expected to depreciate more over the lease term, and that depreciation is what you're paying for through the monthly depreciation fee, so more depreciation means a higher payment.
Google AdSense Banner
This area will contain advertisements after approval.