Car Lease Payment Calculator
Estimate your monthly lease payments including depreciation and finance fees.
Gross Capitalized Cost:
$0.00
Residual Value:
$0.00
Monthly Depreciation:
$0.00
Monthly Rent Charge:
$0.00
Total Monthly Payment:
$0.00
How Car Lease Payments are Calculated
Leasing a vehicle is significantly different from traditional financing. Instead of paying for the entire value of the car, you are essentially paying for the depreciation that occurs during the period you drive it, plus interest and taxes.
The Lease Formula Components
- Gross Capitalized Cost: This is the negotiated price of the vehicle plus any added fees or prior lease balances.
- Capitalized Cost Reduction: This is the sum of your down payment, trade-in value, and any manufacturer rebates. Subtracting this from the Gross Cap Cost gives you the Adjusted Cap Cost.
- Residual Value: This is what the leasing company predicts the car will be worth at the end of your lease. It is usually expressed as a percentage of the original MSRP.
- Money Factor: This is the interest rate on a lease. To find the equivalent APR, multiply the Money Factor by 2,400. For example, a Money Factor of 0.00125 is equal to a 3% APR.
Real-World Example
Imagine you lease a car with an MSRP of $40,000 and a negotiated price of $38,000. You put $3,000 down. The 36-month residual is 60% ($24,000), and the money factor is 0.0015.
1. Monthly Depreciation: ($35,000 Adjusted Cap Cost – $24,000 Residual) / 36 Months = $305.56 per month.
2. Monthly Rent Charge: ($35,000 Adjusted Cap Cost + $24,000 Residual) * 0.0015 Money Factor = $88.50 per month.
3. Base Payment: $305.56 + $88.50 = $394.06 (before taxes).
Tips for a Better Lease Deal
To lower your monthly payment, focus on negotiating the Sale Price (Capitalized Cost) just as you would if buying the car. Avoid putting too much money down on a lease; if the car is totaled shortly after leaving the lot, that down payment is often lost. Instead, keep your cash in a savings account and use it to make the slightly higher monthly payments.