Car Lease Calculator

Car Lease Payment Calculator

Use this calculator to estimate your potential monthly car lease payments and the total cost over the lease term. Understanding these figures can help you budget and compare different lease offers effectively.

Lease Estimate

Estimated Monthly Lease Payment: $0.00

Estimated Total Lease Cost: $0.00

function calculateLeasePayment() { var vehicleMSRP = parseFloat(document.getElementById('vehicleMSRP').value); var leaseTermMonths = parseFloat(document.getElementById('leaseTermMonths').value); var residualValuePercent = parseFloat(document.getElementById('residualValuePercent').value); var moneyFactor = parseFloat(document.getElementById('moneyFactor').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); // Validate inputs if (isNaN(vehicleMSRP) || isNaN(leaseTermMonths) || isNaN(residualValuePercent) || isNaN(moneyFactor) || isNaN(capitalizedCostReduction) || isNaN(tradeInValue) || isNaN(salesTaxRate) || isNaN(acquisitionFee) || vehicleMSRP <= 0 || leaseTermMonths <= 0 || residualValuePercent < 0 || moneyFactor < 0) { document.getElementById('monthlyLeasePayment').innerText = 'Invalid Input'; document.getElementById('totalLeaseCost').innerText = 'Invalid Input'; return; } // 1. Calculate Adjusted Capitalized Cost var adjustedCapitalizedCost = vehicleMSRP – capitalizedCostReduction – tradeInValue; if (adjustedCapitalizedCost < 0) adjustedCapitalizedCost = 0; // Cannot be negative // 2. Calculate Residual Value Amount var residualValueAmount = vehicleMSRP * (residualValuePercent / 100); // 3. Calculate Depreciation Portion (per month) var depreciationPortion = (adjustedCapitalizedCost – residualValueAmount) / leaseTermMonths; if (depreciationPortion < 0) depreciationPortion = 0; // Depreciation cannot be negative // 4. Calculate Finance Portion (per month) var financePortion = (adjustedCapitalizedCost + residualValueAmount) * moneyFactor; // 5. Calculate Base Monthly Payment var baseMonthlyPayment = depreciationPortion + financePortion; // 6. Calculate Sales Tax Amount (per month) var salesTaxAmount = baseMonthlyPayment * (salesTaxRate / 100); // 7. Calculate Total Monthly Payment var totalMonthlyPayment = baseMonthlyPayment + salesTaxAmount; // 8. Calculate Total Lease Cost var totalLeaseCost = (totalMonthlyPayment * leaseTermMonths) + capitalizedCostReduction + acquisitionFee; document.getElementById('monthlyLeasePayment').innerText = '$' + totalMonthlyPayment.toFixed(2); document.getElementById('totalLeaseCost').innerText = '$' + totalLeaseCost.toFixed(2); } // Calculate on page load with default values window.onload = calculateLeasePayment;

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 more frequently. However, it's crucial to understand the components that make up your lease payment to ensure you're getting a good deal.

Key Lease Terms Explained:

• Vehicle MSRP (Manufacturer's Suggested Retail Price): This is the starting price of the car. In leasing, it's often referred to as the "Gross Capitalized Cost" before any reductions.
• Lease Term (Months): The duration of your lease agreement, typically ranging from 24 to 48 months. A shorter term usually means higher monthly payments but less long-term commitment.
• Residual Value (% of MSRP): This is the estimated value of the car at the end of the lease term, expressed as a percentage of the MSRP. A higher residual value generally leads to lower monthly payments because you're depreciating less of the car's value.
• Money Factor: This is the leasing company's equivalent of an interest rate, representing the cost of borrowing. It's usually a very small decimal (e.g., 0.00250). To convert it to an approximate annual percentage rate (APR), multiply it by 2400 (0.00250 * 2400 = 6% APR). A lower money factor means lower finance charges.
• Capitalized Cost Reduction ($): This is an upfront payment you make to reduce the total amount being financed (the "Adjusted Capitalized Cost"). It's similar to a down payment on a purchase and will lower your monthly payments.
• Trade-in Value ($): If you trade in your current vehicle, its value can be applied as a capitalized cost reduction, further lowering your lease payments.
• Sales Tax Rate (%): Sales tax is typically applied to your monthly lease payment in most states, though some states tax the entire capitalized cost upfront. Our calculator applies it to the monthly payment.
• Acquisition Fee ($): A fee charged by the leasing company for initiating the lease. This is usually paid upfront or rolled into the lease payments.

How Your Monthly Lease Payment is Calculated:

A car lease payment primarily consists of two main components:

1. Depreciation Charge: This covers the difference between the car's adjusted capitalized cost and its residual value, spread out over the lease term. It's essentially what you "use up" of the car's value.
2. Finance Charge: This is the cost of borrowing the money, calculated using the money factor on the sum of the adjusted capitalized cost and the residual value.

These two charges, plus any applicable sales tax, make up your total monthly lease payment.

Example Scenario:

Let's consider a car with an MSRP of $35,000. You negotiate a 36-month lease with a 58% residual value and a money factor of 0.00200. You put down a $1,500 capitalized cost reduction and have no trade-in. The sales tax rate is 7%, and there's a $695 acquisition fee.

• Adjusted Capitalized Cost: $35,000 (MSRP) – $1,500 (Cap Cost Reduction) = $33,500
• Residual Value Amount: $35,000 * 0.58 = $20,300
• Depreciation Portion: ($33,500 – $20,300) / 36 months = $13,200 / 36 = $366.67 per month
• Finance Portion: ($33,500 + $20,300) * 0.00200 = $53,800 * 0.00200 = $107.60 per month
• Base Monthly Payment: $366.67 + $107.60 = $474.27
• Sales Tax: $474.27 * 0.07 = $33.20 per month
• Total Monthly Payment: $474.27 + $33.20 = $507.47
• Total Lease Cost: ($507.47 * 36 months) + $1,500 (Cap Cost Reduction) + $695 (Acquisition Fee) = $18,268.92 + $1,500 + $695 = $20,463.92

This example demonstrates how each factor contributes to your final monthly payment and the overall cost of the lease.