🚗 Car Lease Calculator

How the Car Lease Calculator Works

A lease payment has two main parts. The depreciation fee covers the value the car is expected to lose during the lease: the net capitalized cost (the negotiated price minus down payment and trade-in, plus any fees rolled in) minus the residual value (the car’s projected value at the end, set as a percentage of MSRP), divided by the number of months. The finance fee is the lease’s interest charge: net capitalized cost plus residual value, multiplied by the money factor.

The money factor is a lease’s interest rate written as a small decimal; multiplying it by 2,400 gives an approximate APR (0.00250 ≈ 6%). Many US states apply sales tax to the monthly payment, which this calculator does; some tax the full price upfront instead. Mileage limits, acquisition and disposition fees, and end-of-lease charges vary by contract.

Formula

Net cap cost   = price − down payment − trade-in + fees rolled in
Residual value = MSRP × residual %
Depreciation   = (net cap cost − residual) ÷ months
Finance fee    = (net cap cost + residual) × money factor
Monthly payment = (depreciation + finance fee) × (1 + sales tax %)
Money factor ≈ APR ÷ 2,400

How to Use It

1. Enter the negotiated price and the MSRP.
2. Enter the residual percentage and the money factor (or APR).
3. Enter the term, down payment, trade-in, fees, and sales tax.
4. Read the monthly payment and the total cost of the lease.

Frequently Asked Questions

How is a car lease payment calculated?

Monthly payment = depreciation fee + finance fee, plus sales tax where it applies. Depreciation is (net cap cost − residual) ÷ months; the finance fee is (net cap cost + residual) × money factor.

What is a money factor?

It is the interest rate on a lease expressed as a decimal. Multiply it by 2,400 to get an approximate APR: a money factor of 0.00200 is about 4.8%.

What is a residual value?

The leasing company’s estimate of the car’s value at the end of the lease, set as a percentage of MSRP. A higher residual means less depreciation to pay for and a lower payment.

Does a bigger down payment lower a lease payment?

Yes, because it reduces the net capitalized cost. However, money paid upfront on a lease may not be recoverable if the car is totaled or the lease ends early.

Related Glossary Terms

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Formula and content last reviewed: September 2026. All calculations run in your browser — nothing you enter is sent to or stored on our servers.