Car Lease Calculator
Estimate your monthly car lease payments based on MSRP, money factor, and residual value.
How to Calculate Your Car Lease Payment
Leasing a vehicle is often more complex than a standard purchase because the payment is based on the vehicle's depreciation rather than its full value. To get an accurate estimate, you need to understand several key components that our car lease calculator uses.
1. Negotiated Price (Gross Capitalized Cost)
This is the actual price you agree to pay for the vehicle. It's often lower than the MSRP (Manufacturer's Suggested Retail Price). The lower this number, the lower your monthly payment.
2. Residual Value
The residual value is the estimated value of the car at the end of the lease. For example, if a $35,000 car has a 60% residual value after 36 months, it is expected to be worth $21,000. You are essentially paying for the $14,000 difference (depreciation).
3. Money Factor
The money factor represents the interest rate on a lease. To convert the money factor to a standard APR, multiply it by 2400. For instance, a money factor of 0.00125 is equivalent to a 3% APR.
Real-World Example
Imagine you are leasing a SUV with the following terms:
- MSRP: $40,000
- Sales Price: $38,000
- Down Payment: $3,000
- Term: 36 Months
- Residual: 55% ($22,000)
- Money Factor: 0.0015 (3.6% APR)
In this scenario, your Adjusted Cap Cost would be $35,000 ($38k – $3k). Your total depreciation over 3 years is $13,000 ($35k – $22k), making your monthly depreciation charge $361.11. The rent charge (finance fee) would be ($35k + $22k) * 0.0015 = $85.50. Totaling these with tax would result in a monthly payment of roughly $477.85.