Use this calculator to estimate your monthly lease payments and total lease cost for a new or used vehicle. Understand how factors like vehicle price, residual value, money factor, and upfront costs impact your lease.
Lease Summary
Estimated Monthly Payment:
Total Upfront Costs:
Total Lease Cost (excluding purchase option):
Estimated Residual Value:
Total Depreciation Over Lease:
Total Finance Charge Over Lease:
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function calculateLease() {
var vehicleMSRP = parseFloat(document.getElementById('vehicleMSRP').value);
var residualPercentage = parseFloat(document.getElementById('residualPercentage').value);
var leaseTermMonths = parseFloat(document.getElementById('leaseTermMonths').value);
var moneyFactor = parseFloat(document.getElementById('moneyFactor').value);
var capCostReduction = parseFloat(document.getElementById('capCostReduction').value);
var tradeInValue = parseFloat(document.getElementById('tradeInValue').value);
var salesTaxRate = parseFloat(document.getElementById('salesTaxRate').value);
var acquisitionFee = parseFloat(document.getElementById('acquisitionFee').value);
var docFee = parseFloat(document.getElementById('docFee').value);
// Validate inputs
if (isNaN(vehicleMSRP) || vehicleMSRP < 0) {
alert('Please enter a valid Vehicle MSRP.');
return;
}
if (isNaN(residualPercentage) || residualPercentage 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(capCostReduction) || capCostReduction < 0) {
alert('Please enter a valid Capitalized Cost Reduction.');
return;
}
if (isNaN(tradeInValue) || tradeInValue < 0) {
alert('Please enter a valid Trade-in Value.');
return;
}
if (isNaN(salesTaxRate) || salesTaxRate < 0) {
alert('Please enter a valid Sales Tax Rate.');
return;
}
if (isNaN(acquisitionFee) || acquisitionFee < 0) {
alert('Please enter a valid Acquisition Fee.');
return;
}
if (isNaN(docFee) || docFee < 0) {
alert('Please enter a valid Documentation Fee.');
return;
}
// 1. Calculate Residual Value Amount
var residualValueAmount = vehicleMSRP * (residualPercentage / 100);
// 2. Calculate Net Capitalized Cost
var netCapitalizedCost = vehicleMSRP – capCostReduction – tradeInValue;
if (netCapitalizedCost < 0) {
netCapitalizedCost = 0; // Cannot have negative capitalized cost
}
// 3. Calculate Depreciation Amount
var depreciationAmount = netCapitalizedCost – residualValueAmount;
if (depreciationAmount < 0) {
depreciationAmount = 0; // Cannot have negative depreciation
}
// 4. Calculate Monthly Depreciation
var monthlyDepreciation = depreciationAmount / leaseTermMonths;
// 5. Calculate Monthly Finance Charge
var monthlyFinanceCharge = (netCapitalizedCost + residualValueAmount) * moneyFactor;
// 6. Calculate Base Monthly Payment (before tax)
var baseMonthlyPayment = monthlyDepreciation + monthlyFinanceCharge;
// 7. Calculate Monthly Sales Tax
var monthlySalesTax = baseMonthlyPayment * (salesTaxRate / 100);
// 8. Calculate Total Monthly Payment
var totalMonthlyPayment = baseMonthlyPayment + monthlySalesTax;
// 9. Calculate Total Upfront Costs
var totalUpfrontCosts = capCostReduction + acquisitionFee + docFee + totalMonthlyPayment; // Includes first month's payment
// 10. Calculate Total Lease Cost (excluding purchase option)
var totalLeaseCost = (totalMonthlyPayment * leaseTermMonths) + acquisitionFee + docFee + capCostReduction;
// Note: Trade-in value reduces the capitalized cost, so it's already factored into lower monthly payments.
// It's not an additional "cost" to add back here.
// Display results
document.getElementById('monthlyPaymentResult').innerText = '$' + totalMonthlyPayment.toFixed(2);
document.getElementById('upfrontCostsResult').innerText = '$' + totalUpfrontCosts.toFixed(2);
document.getElementById('totalLeaseCostResult').innerText = '$' + totalLeaseCost.toFixed(2);
document.getElementById('residualValueAmountResult').innerText = '$' + residualValueAmount.toFixed(2);
document.getElementById('depreciationAmountResult').innerText = '$' + depreciationAmount.toFixed(2);
document.getElementById('financeChargeResult').innerText = '$' + (monthlyFinanceCharge * leaseTermMonths).toFixed(2);
}
// Calculate on page load with default values
window.onload = calculateLease;
Understanding Your Vehicle Lease: A Comprehensive Guide
Leasing a vehicle can be an attractive option for many drivers, offering lower monthly payments compared to purchasing, the ability to drive a new car more frequently, and often, fewer maintenance worries. However, understanding how a lease payment is calculated is crucial to making an informed decision. Our Lease Payment Calculator helps demystify the process by breaking down the key components.
What is a Vehicle Lease?
A vehicle lease is essentially a long-term rental agreement. Instead of buying the car, you pay for the depreciation of the vehicle over a set period (the lease term) plus a finance charge. At the end of the lease, you typically have the option to return the car, purchase it, or lease a new one.
Key Components of a Lease Payment
Several factors contribute to your monthly lease payment and the overall cost of leasing. Here's a breakdown of the inputs used in our calculator:
Vehicle MSRP (Manufacturer's Suggested Retail Price): This is the starting price of the vehicle. While you don't pay the full MSRP, it's the basis for calculating depreciation and residual value. Negotiating a lower "capitalized cost" (the agreed-upon price of the vehicle for the lease) can significantly reduce your payments.
Residual Value (% of MSRP): 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 the car is expected to depreciate less, resulting in lower monthly payments for you.
Lease Term (Months): This is the duration of your lease agreement, typically ranging from 24 to 48 months. A longer lease term can lower monthly payments but might result in higher overall finance charges and more depreciation.
Money Factor: This is the lease equivalent of an interest rate. It's a very small decimal number (e.g., 0.00180). To convert it to an approximate annual percentage rate (APR), multiply it by 2400 (0.00180 * 2400 = 4.32% APR). A lower money factor means lower finance charges.
Capitalized Cost Reduction ($): This is an upfront payment you make at the beginning of the lease to reduce the total amount being financed. It's similar to a down payment on a purchase and will lower your monthly payments.
Trade-in Value ($): If you trade in your current vehicle, its value can be applied as a capitalized cost reduction, further lowering your net capitalized cost and thus your monthly payments.
Sales Tax Rate (%): Sales tax is typically applied to your monthly payment in most states, though some states may tax the full capitalized cost upfront. Our calculator applies it to the monthly payment.
Acquisition Fee ($): This is a fee charged by the leasing company for initiating the lease. It covers administrative costs and is usually paid upfront or rolled into the lease.
Documentation Fee ($): A fee charged by the dealership for processing paperwork related to the lease.
How Lease Payments Are Calculated
The core of a lease payment consists of two main parts: depreciation and finance charges.
Depreciation Portion: This is the difference between the net capitalized cost (MSRP minus any capitalized cost reductions like down payments or trade-ins) and the residual value, divided by the lease term. This covers the amount the car is expected to lose in value during your lease.
Finance Charge Portion: This is calculated based on the "average outstanding balance" of the lease, which is roughly the sum of the net capitalized cost and the residual value, multiplied by the money factor. This is the cost of borrowing the money for the lease.
These two portions are added together to get your base monthly payment. Sales tax is then applied to this base payment to arrive at your total estimated monthly payment.
Understanding the Results
Estimated Monthly Payment: This is the total amount you'll pay each month, including depreciation, finance charges, and sales tax.
Total Upfront Costs: This includes your capitalized cost reduction, acquisition fee, documentation fee, and your first month's payment.
Total Lease Cost: This is the sum of all your monthly payments over the lease term, plus any upfront fees (acquisition fee, documentation fee) and capitalized cost reduction. It represents the total money you will spend during the lease period, excluding any end-of-lease charges like excess mileage or wear and tear.
Estimated Residual Value: The projected value of the car at the end of your lease. This is important if you consider purchasing the vehicle at lease end.
Total Depreciation Over Lease: The total amount the vehicle is expected to lose in value during your lease term, which you are paying for.
Total Finance Charge Over Lease: The total cost of financing the lease over its entire term.
By using this calculator and understanding these terms, you can better compare lease offers and ensure you're getting a deal that fits your budget and needs.