Car Lease Calculator
Calculate a car lease payment from MSRP, negotiated price, residual percentage and money factor, with depreciation, rent charge, sales tax and the APR equivalent.
The interactive tool loads here when JavaScript runs.
About this toolWhat is the Car Lease Calculator?
The Car Lease Calculator builds a lease payment from the same pieces leasing companies use: the capitalized cost (the price you negotiate plus capitalized fees, minus anything you pay down), the residual value the car is expected to be worth at the end, the money factor that sets the finance charge, and the term.
It splits the payment into its two parts, the depreciation fee and the rent charge, adds sales tax on the payment, and converts the money factor to an approximate APR so you can compare it with a loan. Switch the rate box to APR if the dealer quoted a percentage instead.
You also get the adjusted cap cost, the residual in money, totals for depreciation and rent over the lease, the total cost of leasing including your down payment, and how much each 1,000 of price negotiation lowers the payment.
- Depreciation fee and rent charge shown separately
- Money factor or APR input with automatic conversion (× 2400)
- Cap cost reductions for cash, trade-in equity and rebates
- Capitalized acquisition and other fees
- Sales tax on each payment and total lease cost
How to use the Car Lease Calculator
- Enter the MSRP and the negotiated selling price.
- Enter the residual percentage and the lease term in months from the lease quote.
- Enter the money factor, or switch to APR and type the rate as a percentage.
- Add any cash down, trade-in equity and rebates, plus the acquisition fee and other fees rolled into the lease.
- Set the sales tax rate on payments and read the payment, the depreciation and rent split, and the total lease cost.
Worked examples
A 36-month lease on a 40,000 car
Input
MSRP 40,000; price 37,500; 2,000 down; 695 acquisition fee; 58% residual; money factor 0.0025; 7% tax
Output
Payment 545.12: depreciation 360.97 + rent 148.49 + tax 35.66
Adjusted cap cost is 36,195 and the residual is 23,200, so you pay for 12,995 of depreciation over 36 months. The rent charge totals 5,345.55, the lease's finance cost at about 6% APR.
Zero down
Input
Same lease with no cash down
Output
Payment 609.92; total lease cost 21,956.99 against 21,624.39 with 2,000 down
Putting money down saves a little rent charge but that cash is lost if the car is written off early. Many advisers suggest keeping the down payment small on a lease for that reason.
Lower residual
Input
Same lease with a 52% residual
Output
Payment 610.04
Six points of residual on a 40,000 MSRP is 2,400 more depreciation, about 65 a month more. Models that hold their value lease more cheaply.
Background and insight
A lease charges you for the value the car loses while you have it, plus a finance charge. The monthly depreciation fee is (adjusted cap cost − residual value) ÷ months. The monthly rent charge is (adjusted cap cost + residual value) × money factor. Adding the two gives the base payment, and most US states then apply sales tax to each payment.
The money factor is the lease's interest rate in disguise. Multiplying by 2,400 gives the approximate APR: 0.0025 is about 6%. The 2,400 comes from 24 × 100, because the rent charge is applied to cap cost plus residual, roughly twice the average balance, and the result is turned into a percentage. Dealers may mark up the buy rate set by the leasing company, so ask for the money factor in writing.
The residual percentage is set by the leasing company and applies to MSRP, not to the price you negotiate. That is why a discount off the price lowers the payment so directly: it shrinks the cap cost while the residual stays put. A higher residual means less depreciation to pay for.
Common use cases
Checking a dealer lease quote
Rebuild the payment from the cap cost, residual and money factor on the worksheet to spot hidden fees or a marked-up rate.
Lease versus buy
Compare the total lease cost with the interest and depreciation of buying the same car with the Auto Loan Calculator.
Negotiating price
See how much each 1,000 off the selling price saves per month.
Comparing lease deals
Put two advertised offers on the same basis by entering their residuals and money factors.
Tips and limitations
- Negotiate the selling price as if you were buying. The residual is fixed, so every dollar off the price reduces depreciation.
- Ask for the money factor and the buy rate. If the quoted factor times 2,400 is well above current loan APRs, it may be marked up.
- Mileage limits matter. Excess miles are charged per mile at turn-in and are not part of this payment.
- Taxes on leases vary: most states tax each payment, while some tax the full price or the total of payments up front. Set the rate to 0 and add tax to fees if yours does that.
- Due-at-signing amounts such as the first payment, registration and doc fees are not included unless you capitalize them.
Frequently asked questions
How is a car lease payment calculated?
Depreciation fee = (adjusted cap cost − residual) ÷ term; rent charge = (adjusted cap cost + residual) × money factor; payment = (depreciation + rent) × (1 + sales tax rate). With a 36,195 cap cost, a 23,200 residual, 36 months, a 0.0025 money factor and 7% tax, that is 545.12.
How do I convert a money factor to an APR?
Multiply by 2,400. A money factor of 0.00125 is 3% APR and 0.0025 is 6%. To go the other way, divide the APR by 2,400. The result is an approximation that is close enough to compare a lease with a car loan.
What is a good residual value on a lease?
Higher is better for the lessee, because you pay for less depreciation. For a 36-month lease, residuals in the mid 50s to 60s percent of MSRP are common on vehicles that hold value well. The residual is set by the leasing company for each model and term and is not usually negotiable.
Should I put money down on a car lease?
A down payment lowers the monthly payment almost one for one and saves only a little rent charge. If the car is stolen or totalled early, GAP coverage pays off the lease but the down payment is usually lost. Many people prefer to keep cash down to the minimum.
What is the difference between gross and adjusted capitalized cost?
Gross cap cost is the negotiated price plus anything rolled in, such as the acquisition fee. Adjusted cap cost subtracts cap cost reductions: cash down, trade-in equity and rebates. The adjusted figure is what the depreciation and rent charge are based on.
Why does my lease quote differ from this calculator?
Common reasons are a different money factor than advertised, extra fees capitalized into the lease, tax charged up front instead of monthly, or a first payment collected at signing. Ask the dealer for the cap cost, residual, money factor and fees, enter them here and compare line by line.
Is there an in-depth guide to the Car Lease Calculator?
Yes. “Car Loans, Leases and Paying Off Debt: The Numbers That Matter” covers the background, how it works, common pitfalls and worked examples. Read the full guide.
Related Tools You May Like
Free, in-browser tools that pair well with this one.