Car Lease Calculator
This lease calculator estimates the monthly payment on a car lease the way dealers quote it: a depreciation fee plus a rent charge, plus sales tax on the payment if your state charges it. Enter the negotiated price, your down payment, the residual value, the term and an APR or money factor to see what each part costs and what you pay over the lease.
Updated
Results
- Depreciation fee(Cap cost − residual) ÷ months
- Rent charge(Cap cost + residual) × money factor
- Sales tax per month
- Residual valueValue at lease end
- Money factor used
- Total of payments + downExcludes fees and buyout
- Adjusted capitalized costPrice − down payment
Results are estimates. See the methodology below.
How to use the calculator
- Vehicle price: the price you negotiated with the dealer (the gross capitalized cost).
- Down payment: cash, rebates or trade-in equity that reduce the capitalized cost (a capitalized cost reduction).
- Residual value: the vehicle's projected value at lease end, as a percentage of the price you entered.
- Lease term: the number of monthly payments, usually 24 to 48.
- APR: the calculator turns it into a money factor. If the dealer quotes a money factor, enter it under advanced options; it overrides the APR.
- Sales tax: your combined state and local rate, if your state taxes monthly lease payments. Leave 0 to see the pre-tax payment.
How a lease payment is calculated
A lease payment has two main parts, the same ones a lessor must disclose under the federal Consumer Leasing Act (Regulation M):
- Depreciation:
(adjusted cap cost − residual) ÷ months. The adjusted capitalized cost is the price minus your down payment. - Rent charge:
(adjusted cap cost + residual) × money factor. This is the financing cost of the lease.
The money factor is the lease's rate written as a small decimal. By the usual industry convention, money factor = APR ÷ 2,400, so 6% APR becomes 0.00250. If you enter a sales tax rate, it is applied to depreciation plus rent charge. Total cost is all monthly payments plus the down payment.
What is not included
Acquisition fees, registration and title, taxes due at signing, security deposits, the disposition fee, charges for extra miles or excess wear, and the purchase price if you buy the car at the end. Ask for the full disclosure sheet, which must list these amounts.
Examples
1. A $40,000 car for 36 months
You negotiate $40,000, put $3,000 down, the residual is 58% and the rate is 6% APR. The adjusted cap cost is $37,000 and the residual $23,200. Depreciation is $383.33 a month and the rent charge, at a money factor of 0.00250, is $150.50, for a payment of $533.83. Over the lease you pay $22,218.00 including the down payment.
2. Same lease with 7% sales tax on the payment
Tax adds $37.37 a month, so the payment becomes $571.20 and the total $23,563.26.
3. A lower money factor
If the lessor offers a money factor of 0.00150 (3.6% APR) on example 1, the rent charge falls to $90.30 and the payment to $473.63, $20,050.80 in total.
4. How the residual changes the payment
| Residual | Monthly payment (example 1, no tax) |
|---|---|
| 50% | $614.72 |
| 55% | $564.17 |
| 58% | $533.83 |
| 62% | $493.39 |
Reading the result
The residual drives most of the payment: the higher it is, the less depreciation you pay. The money factor drives the rent charge. Both are set by the lessor, so compare offers on the same term and annual mileage, and look at the total cost, not just the monthly payment. Most leases limit mileage, often 12,000 to 15,000 miles a year, and charge for miles above the limit when you return the car.
Frequently asked questions
What is a money factor on a car lease?
It is the rate used to compute the rent charge, written as a decimal such as 0.00250. Multiply by 2,400 to compare it with an APR: 0.00250 is about 6%. Ask the dealer which money factor the lease uses, since it isn't always shown on the disclosure as a rate.
What is a good residual value?
Residuals are set by the leasing company for each model, term and mileage. A higher residual means a lower payment, as the table above shows, but it also means a higher price if you decide to buy the car at the end.
Is sales tax charged on the monthly payment?
It depends on your state. Many tax each monthly payment, which is what this calculator does; others handle taxes differently, and some charge taxes or fees at signing. Check with your state revenue or motor vehicle agency, and look for taxes on the lease disclosure.
Should I put money down on a lease?
A down payment lowers the payment: example 1 with $0 down costs $624.67 a month and $22,488.00 in total. Compare both totals before deciding how much to put down.
Can I end a lease early?
Usually yes, but early termination charges can be substantial, and the earlier you end the lease, the higher they tend to be. The contract explains how they are calculated.
What does the residual mean if I want to keep the car?
You can buy the car only if the lease includes a purchase option; the contract states the price and any fee. If that price equals the residual, in example 1 you would pay $23,200 on top of the $22,218.00 already paid.
Sources
This is an estimate for comparison only, not financial or tax advice. Your actual payment, taxes and fees are those on the lease disclosure from the lessor.