Car Lease Payment Calculator
Use this calculator to estimate your monthly car lease payments. Understanding the various components of a lease, such as the vehicle's selling price, residual value, money factor, and any upfront reductions, is crucial for making an informed decision.
Understanding Your Car Lease
Leasing a car can be an attractive option for many drivers, offering lower monthly payments compared to purchasing, and the flexibility to drive a new vehicle every few years. However, it's essential to understand how lease payments are calculated to ensure you're getting a good deal.
Key Components of a Car Lease:
- Vehicle Selling Price: This is the agreed-upon price of the car, similar to if you were buying it. It's the starting point for calculating the lease.
- Residual Value Percentage: This is the estimated value of the car at the end of the lease term, expressed as a percentage of the Vehicle Selling Price. A higher residual value generally leads to lower monthly payments because you're depreciating less of the car's value.
- Lease Term (Months): The duration of your lease agreement, typically 24, 36, or 48 months.
- Money Factor: This is the lease equivalent of an interest rate. It represents the cost of financing the lease. To convert a money factor to an approximate Annual Percentage Rate (APR), multiply it by 2400. For example, a money factor of 0.0005 is roughly equivalent to a 1.2% APR (0.0005 * 2400 = 1.2).
- Capitalized Cost Reduction: This is an upfront payment you make to reduce the total amount being financed (the "capitalized cost"). It's similar to a down payment but for a lease. While it lowers your monthly payments, it's money you won't get back.
- Trade-in Value Applied: If you trade in your current vehicle, its value can be applied to reduce the capitalized cost, similar to a capitalized cost reduction.
- Acquisition Fee: A fee charged by the leasing company for setting up the lease. This is typically paid upfront or rolled into the capitalized cost.
- Sales Tax Rate: Sales tax is usually applied to the monthly payment in most states, though some states tax the total capitalized cost upfront. Our calculator applies it to the monthly payment.
How the Calculator Works:
The calculator estimates your monthly lease payment by breaking it down into two main parts: depreciation and finance charges.
- Adjusted Capitalized Cost: This is calculated as (Vehicle Selling Price – Capitalized Cost Reduction – Trade-in Value Applied + Acquisition Fee). This is the net amount you are effectively financing.
- Residual Value ($): This is calculated as (Vehicle Selling Price * Residual Value Percentage / 100).
- Depreciation Portion: This is the amount the car is expected to lose in value over the lease term. It's calculated as (Adjusted Capitalized Cost – Residual Value) / Lease Term.
- Finance Portion: This is the cost of borrowing the money for the lease. It's calculated as (Adjusted Capitalized Cost + Residual Value) * Money Factor.
- Base Monthly Payment: This is the sum of the Depreciation Portion and the Finance Portion.
- Monthly Sales Tax: This is calculated as (Base Monthly Payment * Sales Tax Rate / 100).
- Total Monthly Payment: This is the Base Monthly Payment plus the Monthly Sales Tax.
Example Calculation:
Let's use the default values:
- Vehicle Selling Price: $35,000
- Residual Value Percentage: 55%
- Lease Term: 36 months
- Money Factor: 0.0006
- Capitalized Cost Reduction: $1,000
- Trade-in Value Applied: $0
- Acquisition Fee: $595
- Sales Tax Rate: 7%
- Adjusted Capitalized Cost = $35,000 – $1,000 – $0 + $595 = $34,595
- Residual Value = $35,000 * 0.55 = $19,250
- Depreciation Portion = ($34,595 – $19,250) / 36 = $15,345 / 36 = $426.25
- Finance Portion = ($34,595 + $19,250) * 0.0006 = $53,845 * 0.0006 = $32.31
- Base Monthly Payment = $426.25 + $32.31 = $458.56
- Monthly Sales Tax = $458.56 * 0.07 = $32.10
- Total Monthly Payment = $458.56 + $32.10 = $490.66
This example demonstrates how each factor contributes to your final monthly payment. Remember that actual lease offers may vary based on specific dealer incentives, regional taxes, and creditworthiness.
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function calculateLease() {
var vehicleSellingPrice = parseFloat(document.getElementById("vehicleSellingPrice").value);
var residualValuePercentage = parseFloat(document.getElementById("residualValuePercentage").value);
var leaseTermMonths = parseFloat(document.getElementById("leaseTermMonths").value);
var moneyFactor = parseFloat(document.getElementById("moneyFactor").value);
var capitalizedCostReduction = parseFloat(document.getElementById("capitalizedCostReduction").value);
var tradeInValue = parseFloat(document.getElementById("tradeInValue").value);
var acquisitionFee = parseFloat(document.getElementById("acquisitionFee").value);
var salesTaxRate = parseFloat(document.getElementById("salesTaxRate").value);
// Input validation
if (isNaN(vehicleSellingPrice) || vehicleSellingPrice <= 0) {
alert("Please enter a valid Vehicle Selling Price.");
return;
}
if (isNaN(residualValuePercentage) || residualValuePercentage 100) {
alert("Please enter a valid Residual Value Percentage (0-100).");
return;
}
if (isNaN(leaseTermMonths) || leaseTermMonths <= 0) {
alert("Please enter a valid Lease Term in months.");
return;
}
if (isNaN(moneyFactor) || moneyFactor < 0) {
alert("Please enter a valid Money Factor.");
return;
}
if (isNaN(capitalizedCostReduction) || capitalizedCostReduction < 0) {
alert("Please enter a valid Capitalized Cost Reduction (or 0).");
return;
}
if (isNaN(tradeInValue) || tradeInValue < 0) {
alert("Please enter a valid Trade-in Value (or 0).");
return;
}
if (isNaN(acquisitionFee) || acquisitionFee < 0) {
alert("Please enter a valid Acquisition Fee (or 0).");
return;
}
if (isNaN(salesTaxRate) || salesTaxRate 100) {
alert("Please enter a valid Sales Tax Rate (0-100).");
return;
}
// Ensure capitalizedCostReduction and tradeInValue don't exceed vehicleSellingPrice
var totalUpfrontReduction = capitalizedCostReduction + tradeInValue;
if (totalUpfrontReduction >= vehicleSellingPrice) {
alert("Total Capitalized Cost Reduction and Trade-in Value cannot be greater than or equal to the Vehicle Selling Price.");
return;
}
// 1. Calculate Adjusted Capitalized Cost
var adjustedCapitalizedCost = vehicleSellingPrice – capitalizedCostReduction – tradeInValue + acquisitionFee;
// 2. Calculate Residual Value in dollars
var residualValueDollars = vehicleSellingPrice * (residualValuePercentage / 100);
// 3. Calculate Depreciation Portion
var totalDepreciation = adjustedCapitalizedCost – residualValueDollars;
var depreciationPortion = totalDepreciation / leaseTermMonths;
// 4. Calculate Finance Portion
var financePortion = (adjustedCapitalizedCost + residualValueDollars) * moneyFactor;
// 5. Calculate Base Monthly Payment
var baseMonthlyPayment = depreciationPortion + financePortion;
// 6. Calculate Monthly Sales Tax
var monthlySalesTax = baseMonthlyPayment * (salesTaxRate / 100);
// 7. Calculate Total Monthly Payment
var totalMonthlyPayment = baseMonthlyPayment + monthlySalesTax;
// Calculate Total Lease Cost (excluding disposition fee)
var totalLeaseCost = (totalMonthlyPayment * leaseTermMonths) + capitalizedCostReduction + tradeInValue + acquisitionFee; // Note: Some upfront costs are already factored into monthly, but if paid separately, they add to total cost. For simplicity here, we're adding the upfronts that reduce the cap cost back to show total money out of pocket.
// Display results
document.getElementById("monthlyPaymentResult").innerText = "$" + totalMonthlyPayment.toFixed(2);
document.getElementById("totalLeaseCostResult").innerText = "$" + totalLeaseCost.toFixed(2);
document.getElementById("totalDepreciationResult").innerText = "$" + totalDepreciation.toFixed(2);
document.getElementById("totalFinanceChargeResult").innerText = "$" + (financePortion * leaseTermMonths).toFixed(2);
}
// Run calculation on page load with default values
window.onload = calculateLease;