Use this calculator to estimate your monthly car lease payments and understand the various components that make up a lease. This tool helps you break down the Manufacturer's Suggested Retail Price (MSRP), negotiated selling price, residual value, money factor, and other fees to give you a clear picture of your potential lease costs, similar to how Edmunds.com provides lease estimates.
Understanding Car Leasing
Car leasing is essentially a long-term rental agreement. Instead of buying a car, you pay to use it for a set period (the lease term) and a set number of miles. Your monthly payments primarily cover the car's depreciation during your lease term, plus a finance charge (known as the money factor) and any applicable taxes and fees.
Key Lease Terms Explained:
MSRP (Manufacturer's Suggested Retail Price): This is the sticker price of the vehicle. The residual value (what the car is estimated to be worth at the end of the lease) is typically calculated as a percentage of the MSRP, not your negotiated selling price.
Vehicle Selling Price: This is the negotiated price of the car, similar to what you would pay if you were buying it outright. A lower selling price directly reduces your capitalized cost.
Residual Value Percentage: This is the estimated value of the vehicle at the end of the lease term, expressed as a percentage of the MSRP. A higher residual value means less depreciation, which generally leads to lower monthly payments.
Money Factor: This is the lease equivalent of an interest rate. It's a small decimal number (e.g., 0.00050). To convert it to an approximate annual interest rate, multiply it by 2400 (0.00050 * 2400 = 1.2% APR).
Lease Term (Months): The duration of your lease agreement, typically 24, 36, or 48 months.
Capitalized Cost Reduction: This is any upfront cash payment you make at the beginning of the lease to reduce the total amount being financed (the capitalized cost). It's similar to a down payment.
Trade-in Value: If you trade in your current vehicle, its value can be applied to reduce the capitalized cost of your new lease, similar to a capitalized cost reduction.
Sales Tax Rate (%): The percentage of sales tax applied to your lease. In many states, sales tax is applied to the monthly payment, while in others, it's applied to the total depreciation or the total capitalized cost. This calculator assumes tax is applied to the monthly payment.
Acquisition Fee: A fee charged by the leasing company for initiating the lease. This can sometimes be rolled into the capitalized cost or paid upfront.
Documentation Fee: A fee charged by the dealership for processing paperwork. This can also be rolled into the capitalized cost or paid upfront.
Registration & Other Fees: These include state registration fees, license plate fees, and any other miscellaneous charges. These are often rolled into the capitalized cost.
How Lease Payments Are Calculated
A car lease payment is primarily composed of two parts: the depreciation charge and the finance charge, plus sales tax and any fees. Our calculator uses the following steps:
Calculate Residual Value Amount: MSRP × Residual Value Percentage.
Calculate Gross Capitalized Cost: Vehicle Selling Price + Acquisition Fee + Documentation Fee + Registration & Other Fees (assuming fees are rolled into the lease).
Based on these inputs, your estimated total monthly payment would be approximately $446.63, with $1,446.63 due at signing, and a total lease cost of $17,078.68 over 36 months.
Tips for a Better Lease Deal
Negotiate the Selling Price: Even though you're leasing, negotiating a lower selling price (capitalized cost) is crucial, as it directly reduces your depreciation.
Know the Money Factor: Ask the dealer for the money factor. You can often negotiate this, or compare it to rates from other lenders.
Understand the Residual Value: While often non-negotiable, knowing the residual value helps you understand how much the car is expected to depreciate.
Limit Upfront Payments: While a capitalized cost reduction lowers your monthly payment, it's money you lose if the car is totaled early in the lease. Consider paying only the "due at signing" amount (first month's payment, fees) and keeping your cash.
Watch for Hidden Fees: Always scrutinize the lease agreement for excessive fees.
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function calculateLease() {
var msrp = parseFloat(document.getElementById('msrp').value);
var sellingPrice = parseFloat(document.getElementById('sellingPrice').value);
var residualPercentage = parseFloat(document.getElementById('residualPercentage').value);
var moneyFactor = parseFloat(document.getElementById('moneyFactor').value);
var leaseTerm = parseFloat(document.getElementById('leaseTerm').value);
var capitalizedCostReduction = parseFloat(document.getElementById('capitalizedCostReduction').value);
var tradeInValue = parseFloat(document.getElementById('tradeInValue').value);
var salesTaxRate = parseFloat(document.getElementById('salesTaxRate').value);
var acquisitionFee = parseFloat(document.getElementById('acquisitionFee').value);
var documentationFee = parseFloat(document.getElementById('documentationFee').value);
var registrationFees = parseFloat(document.getElementById('registrationFees').value);
// Validate inputs
if (isNaN(msrp) || isNaN(sellingPrice) || isNaN(residualPercentage) || isNaN(moneyFactor) ||
isNaN(leaseTerm) || isNaN(capitalizedCostReduction) || isNaN(tradeInValue) ||
isNaN(salesTaxRate) || isNaN(acquisitionFee) || isNaN(documentationFee) || isNaN(registrationFees) ||
msrp < 0 || sellingPrice < 0 || residualPercentage < 0 || moneyFactor < 0 ||
leaseTerm <= 0 || capitalizedCostReduction < 0 || tradeInValue < 0 || salesTaxRate < 0 ||
acquisitionFee < 0 || documentationFee < 0 || registrationFees < 0) {
document.getElementById('result').innerHTML = 'Please enter valid positive numbers for all fields.';
return;
}
// Convert percentages to decimals
var residualDecimal = residualPercentage / 100;
var taxDecimal = salesTaxRate / 100;
// 1. Calculate Residual Value Amount
var residualValueAmount = msrp * residualDecimal;
// 2. Calculate Gross Capitalized Cost (assuming fees are rolled into the lease)
var grossCapCost = sellingPrice + acquisitionFee + documentationFee + registrationFees;
// 3. Calculate Adjusted Capitalized Cost
var adjustedCapCost = grossCapCost – capitalizedCostReduction – tradeInValue;
// Ensure adjustedCapCost is not less than residualValueAmount (prevents negative depreciation)
if (adjustedCapCost < residualValueAmount) {
// This scenario implies the car is appreciating or has very low depreciation,
// which is unusual for a lease. For calculation, we'll cap depreciation at 0.
// In a real lease, this would mean a very low payment or a purchase option.
// For simplicity, we'll set adjustedCapCost to residualValueAmount if it's lower.
// This means no depreciation portion, only finance.
// A more robust calculator might flag this as an error or unusual input.
// For now, we'll proceed with a floor.
// However, a lease *must* have depreciation. If adjustedCapCost is less than residual,
// it means the car is worth more than its cost, which is not how leases work.
// Let's add a warning.
document.getElementById('result').innerHTML = 'Adjusted Capitalized Cost cannot be less than the Residual Value Amount. Please check your inputs (e.g., selling price, capitalized cost reduction, trade-in).';
return;
}
// 4. Calculate Depreciation Portion
var depreciationPortion = (adjustedCapCost – residualValueAmount) / leaseTerm;
// 5. Calculate Finance Charge Portion
var financeChargePortion = (adjustedCapCost + residualValueAmount) * moneyFactor;
// 6. Calculate Base Monthly Payment (before tax)
var baseMonthlyPayment = depreciationPortion + financeChargePortion;
// 7. Calculate Monthly Sales Tax (assuming tax on monthly payment)
var monthlyTax = baseMonthlyPayment * taxDecimal;
// 8. Calculate Total Monthly Payment
var totalMonthlyPayment = baseMonthlyPayment + monthlyTax;
// 9. Calculate Due at Signing (Capitalized Cost Reduction + First Month's Payment)
var dueAtSigning = capitalizedCostReduction + totalMonthlyPayment;
// 10. Calculate Total Lease Cost (Total Monthly Payments + Capitalized Cost Reduction)
var totalLeaseCost = (totalMonthlyPayment * leaseTerm) + capitalizedCostReduction;
// Display results
var resultsHtml = '