Car Lease Calculator
Print| Monthly Depreciation Charge | $0.00 |
| Monthly Finance Charge | $0.00 |
Negotiate your next vehicle lease with total transparency. Use this Car Lease Calculator to accurately calculate monthly lease payments, convert dealer money factors into equivalent APRs, compute total depreciation charges, and evaluate drive-off fees.
The Formula for Auto Lease Payments
Calculating a monthly car lease payment requires adding monthly depreciation, rent charge (finance cost), and monthly sales tax:
Gross Capitalized Cost = Vehicle Selling Price + Add-ons & Fees
Adjusted Cap Cost = Gross Cap Cost - Down Payment - Trade-in Credit - Dealer Rebates
Monthly Depreciation = (Adjusted Cap Cost - Residual Value) / Lease Term (Months)
Monthly Rent Charge = (Adjusted Cap Cost + Residual Value) × Money Factor
Base Monthly Payment = Monthly Depreciation + Monthly Rent Charge
Total Monthly Lease Payment = Base Monthly Payment × (1 + Local Sales Tax Rate)
Money Factor Conversion: Equivalent APR = Money Factor × 2,400
Sample Car Lease Payment Breakdown Matrix
Refer to the lookup table below for a sample 36-month lease on a $35,000 vehicle at varying money factors and residual values:
| MSRP / Selling Price | Cap Reduction (Down) | Residual Value (58%) | Money Factor (APR Equivalent) | Est. Monthly Payment (incl. 7% tax) |
|---|---|---|---|---|
| $35,000 | $0 Down | $20,300 | 0.00210 (5.04% APR) | $561 / month |
| $35,000 | $2,500 Down | $20,300 | 0.00210 (5.04% APR) | $486 / month |
| $45,000 | $0 Down | $26,100 | 0.00250 (6.00% APR) | $752 / month |
| $45,000 | $3,000 Down | $26,100 | 0.00250 (6.00% APR) | $662 / month |
Step-by-Step Car Lease Calculation Example
Assume you lease a new crossover vehicle priced at $40,000 with a 36-month term, a 60% residual value ($24,000), a $2,000 down payment, a 0.00225 money factor (5.4% APR), and 7% local sales tax:
- Calculate Adjusted Capitalized Cost: $40,000 – $2,000 down payment = $38,000.
- Calculate Monthly Depreciation Fee: ($38,000 Adjusted Cap Cost – $24,000 Residual Value) / 36 Months = $388.89 per month.
- Calculate Monthly Rent Charge: ($38,000 + $24,000) × 0.00225 = $139.50 per month.
- Calculate Total Monthly Payment with Tax: ($388.89 + $139.50) × 1.07 = $565.38 per month.
Frequently Asked Questions
Should you put money down on a car lease?
Financial experts generally advise against putting large cash down payments on a car lease. If the vehicle is totaled or stolen early in the lease, insurance payouts go to the leasing company, risking total loss of your cash down payment.
What is a good residual value percentage for a lease?
A higher residual value percentage (e.g., 55% to 65% after 3 years) is desirable because it means the vehicle loses less value, resulting in lower monthly lease depreciation payments.
How do you convert a dealer money factor into an interest rate?
Multiply the money factor decimal by 2,400 to find the equivalent annual percentage rate (APR). For instance, a money factor of 0.00250 equals an APR of 6.0% (0.00250 × 2,400).
What happens if I exceed my lease mileage limit?
Lease contracts specify annual mileage limits (typically 10,000, 12,000, or 15,000 miles). If you exceed the cap upon return, dealers charge excess mileage fees ranging from $0.15 to $0.30 per additional mile.