Use this calculator to estimate your monthly lease payment, total lease cost, and the effective annual rate based on key leasing factors. Understanding these components is crucial for making informed leasing decisions.
Understanding Your Lease Rate
When you lease a vehicle, you're essentially paying for the depreciation of the car over the lease term, plus a financing charge. The "lease rate" often refers to the monthly payment, but it's driven by several key factors, including the Money Factor.
Key Components Explained:
Vehicle Selling Price: This is the agreed-upon price of the vehicle, also known as the Gross Capitalized Cost. It's the starting point for your lease calculation.
Amount Paid Upfront: Any cash you pay at the beginning of the lease. This reduces the amount you need to finance, thereby lowering your monthly payments. This is distinct from a "down payment" in a purchase, as it doesn't build equity.
Trade-in Value: If you trade in an existing vehicle, its value can also reduce the capitalized cost, similar to an upfront payment.
Lease Term (months): The duration of your lease agreement, typically ranging from 24 to 48 months. A longer term usually means lower monthly payments but higher overall financing costs.
Residual Value Percentage: This is the estimated value of the vehicle at the end of the lease term, expressed as a percentage of the original MSRP (Manufacturer's Suggested Retail Price) or sometimes the Vehicle Selling Price. A higher residual value means you're paying for less depreciation, resulting in lower monthly payments.
Money Factor: This is the financing charge on a lease, similar to an interest rate but expressed as a very small decimal (e.g., 0.0025). It's multiplied by 2400 to get an approximate annual percentage rate. A lower money factor means lower financing costs.
How the Calculator Works:
Our Lease Rate Calculator uses these inputs to determine your estimated monthly payment. The calculation involves two main parts:
Depreciation Portion: This is calculated by taking the difference between the Adjusted Capitalized Cost (Vehicle Selling Price minus any upfront payments or trade-in) and the Residual Value, then dividing by the Lease Term.
Finance Portion: This is calculated by adding the Adjusted Capitalized Cost and the Residual Value, then multiplying by the Money Factor.
The sum of these two portions gives you your estimated monthly lease payment. The calculator also provides the total cost over the lease term and an equivalent annual rate to help you compare financing options.
Example Scenario:
Let's say you're leasing a car with a Vehicle Selling Price of $35,000. You pay $2,000 upfront and have no trade-in. The Lease Term is 36 months, the Residual Value Percentage is 55%, and the Money Factor is 0.0025.
This calculator helps you quickly see how changes to any of these factors can impact your monthly payment and overall lease cost.
function calculateLeaseRate() {
// Get input values
var vehiclePrice = parseFloat(document.getElementById('vehiclePrice').value);
var upfrontPayment = parseFloat(document.getElementById('upfrontPayment').value);
var tradeInValue = parseFloat(document.getElementById('tradeInValue').value);
var leaseTerm = parseFloat(document.getElementById('leaseTerm').value);
var residualPercent = parseFloat(document.getElementById('residualPercent').value);
var moneyFactor = parseFloat(document.getElementById('moneyFactor').value);
var resultsDiv = document.getElementById('leaseRateResults');
resultsDiv.innerHTML = "; // Clear previous results
// Input validation
if (isNaN(vehiclePrice) || vehiclePrice < 0) {
resultsDiv.innerHTML = 'Please enter a valid Vehicle Selling Price.';
return;
}
if (isNaN(upfrontPayment) || upfrontPayment < 0) {
resultsDiv.innerHTML = 'Please enter a valid Amount Paid Upfront.';
return;
}
if (isNaN(tradeInValue) || tradeInValue < 0) {
resultsDiv.innerHTML = 'Please enter a valid Trade-in Value.';
return;
}
if (isNaN(leaseTerm) || leaseTerm <= 0) {
resultsDiv.innerHTML = 'Please enter a valid Lease Term (must be greater than 0).';
return;
}
if (isNaN(residualPercent) || residualPercent 100) {
resultsDiv.innerHTML = 'Please enter a valid Residual Value Percentage (0-100).';
return;
}
if (isNaN(moneyFactor) || moneyFactor <= 0) {
resultsDiv.innerHTML = 'Please enter a valid Money Factor (must be greater than 0).';
return;
}
// Calculations
var adjustedCapitalizedCost = vehiclePrice – upfrontPayment – tradeInValue;
if (adjustedCapitalizedCost < 0) {
resultsDiv.innerHTML = 'Adjusted Capitalized Cost cannot be negative. Please check your upfront payment and trade-in value.';
return;
}
var residualValueDollars = vehiclePrice * (residualPercent / 100);
var depreciationPortion = (adjustedCapitalizedCost – residualValueDollars) / leaseTerm;
var financePortion = (adjustedCapitalizedCost + residualValueDollars) * moneyFactor;
var monthlyPayment = depreciationPortion + financePortion;
// Total lease cost is the sum of all monthly payments plus any upfront cash paid.
// Trade-in value reduces the capitalized cost, thus reducing monthly payments, so it's not added back as a cost.
var totalLeaseCost = (monthlyPayment * leaseTerm) + upfrontPayment;
var effectiveAnnualRate = moneyFactor * 2400; // Money Factor * 2400 gives approximate APR
// Display results
var resultsHTML = '