Car Lease Calculator: Monthly Lease Payment
Work out a car lease payment from the price, residual value, money factor, term and sales tax, with the depreciation and rent charge shown separately.
A lease payment has two parts. The depreciation charge spreads the drop from the adjusted capitalized cost to the residual value over the term. The rent charge is the adjusted capitalized cost plus the residual, times the money factor, which is the APR divided by 2400. On a car negotiated to $30,000 with an MSRP of $32,000, $2,000 down, $695 of fees, a 58% residual, 4.8% APR and 36 months, that is about $281.53 plus $94.51, or $376.04 a month before tax.
This calculator gives an estimate for general education only and is not financial advice. It uses the standard closed-end lease method with sales tax charged on each monthly payment, and it leaves out amounts due at signing, disposition, mileage and wear charges, and state rules that tax the full price or down payment up front. Your dealer's lease disclosure is the figure that counts. Before signing, read the itemized terms and consider asking a qualified financial professional.
Estimated monthly payment
$398.60
- Adjusted capitalized cost
- $28,695.00
- Residual value
- $18,560.00
- Depreciation charge per month
- $281.53
- Rent charge per month
- $94.51
- Money factor
- 0.00200
- Base payment before tax
- $376.04
- Sales tax per month
- $22.56
- Total of monthly payments
- $14,349.60
- Total rent charge over the lease
- $3,402.36
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About the Car Lease Calculator
A closed-end lease charges you for the part of the car you use up, plus interest on the money tied up in it. The starting point is the capitalized cost: the price you negotiate, plus any fees rolled in. A down payment, trade-in equity or rebate reduces it, and what is left is the adjusted capitalized cost. The residual value is what the leasing company expects the car to be worth when the lease ends, set as a percentage of MSRP, not of your negotiated price. The depreciation charge is the adjusted capitalized cost minus the residual, divided by the months in the term. The rent charge works like interest but uses the money factor, a small decimal equal to the APR divided by 2400. Most states then tax the monthly payment. Two levers move the payment most: a lower negotiated price shrinks the depreciation charge directly, and a higher residual does the same, which is why models that hold their value often lease for less. A large down payment lowers the monthly figure but not the total cost much, and it is money you may not get back if the car is totaled early.
Frequently asked questions
How is a lease payment calculated?+
Take the example on this page: 28695 - 18560 = 10135 of depreciation, and 10135 / 36 = 281.53 a month. The rent charge is (28695 + 18560) x 0.002 = 94.51. Add them: 281.53 + 94.51 = 376.04, then add sales tax, 376.04 x 0.06 = 22.56, for about $398.60 a month.
What is a money factor and how do I convert it?+
It is the lease's interest rate written as a decimal. Multiply the money factor by 2400 to get the equivalent APR, or divide the APR by 2400 to get the money factor. A 4.8% APR is a money factor of 4.8 / 2400 = 0.002. Ask the dealer for the money factor in writing, since a marked-up one raises the rent charge.
Why does the residual use MSRP instead of the price I paid?+
The leasing company sets the residual from the sticker price so it applies the same way to every buyer of that model and term. Negotiating the price down therefore cuts the depreciation charge without cutting the residual, which is the most direct way to lower the payment.
Is it worth putting money down on a lease?+
A down payment lowers the adjusted capitalized cost, so the monthly payment drops, but you are prepaying the same depreciation. If the car is stolen or totaled early, gap coverage usually pays the lender, not you, and the down payment can be lost. Many people put only the first month and fees down for that reason.
Does this include every fee on a lease?+
Only the fees you type into the fees box, which are added to the capitalized cost. Charges paid at signing, the disposition fee at the end, excess-mileage and wear charges, and states that tax the whole price or the down payment up front are not modeled. Check the lease's itemized disclosure for those.
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