Auto Lease Calculator

Instantly estimate your monthly car lease payment with our simple, accurate tool.

Vehicle Price (MSRP)

Lease Term (Months)

Down Payment

Residual Value

Money Factor

Interest Rate (APR)

Sales Tax

How to Calculate Your Car Lease Payment

Leasing a car can be a smart financial move, offering lower monthly payments and the chance to drive a new vehicle every few years. But understanding the cost can be tricky. Our calculator makes it easy by breaking down the three core components of your payment: depreciation, finance charges, and taxes. Simply enter your deal's numbers to get an accurate, instant estimate of what you'll pay each month.

How to Use Our Auto Lease Calculator: A Step-by-Step Guide

Follow these simple steps to get a clear breakdown of your potential lease costs.

Step 1: Vehicle Price (MSRP): Enter the sticker price or, even better, the negotiated price of the car. This is the starting point for the entire calculation.
Step 2: Lease Term & Down Payment: Select how many months you'll lease the car (36 is most common). Then, input any down payment you'll make. A larger down payment reduces the amount you finance and lowers your monthly payment.
Step 3: Residual Value (%): This is the predicted value of the car when your lease ends. You can get this percentage from the dealer. A higher residual value means less depreciation, which is great for you.
Step 4: Money Factor: This is just another way of writing the interest rate (APR). Enter the small decimal number from your lease offer. Our tool automatically converts it to an APR so you can see the interest you're paying.
Step 5: Sales Tax (%): Finally, add your local sales tax rate. Click 'Calculate' to see your detailed monthly payment, total lease cost, and more.

Understanding the Lease Formula

While our calculator handles the math, it's helpful to know how it works. A monthly lease payment is calculated with this basic formula:

Monthly Payment = (Monthly Depreciation Cost) + (Monthly Finance Charge) + (Monthly Sales Tax)

Here’s a breakdown of each part:

Monthly Depreciation: This is the core of your payment. It's the difference between the car's initial price (after your down payment) and its projected residual value, divided by the number of months in your lease. You are essentially paying for the value the car loses while you drive it.
Formula: ((Capitalized Cost - Residual Value) / Lease Term)
Monthly Finance Charge: This is the interest paid each month. It's calculated by adding the capitalized cost and residual value, then multiplying by the money factor.
Formula: ((Capitalized Cost + Residual Value) * Money Factor)

By comparing offers from different dealerships, you can use our tool to find the best deal. If you're deciding between leasing and buying, try our Auto Loan Calculator to compare payments side-by-side.

Frequently Asked Questions (FAQ)

What is a money factor in a car lease?

The money factor is the interest rate you pay during a lease. It's expressed as a small decimal (e.g., 0.0025). To convert it to a more familiar Annual Percentage Rate (APR), you multiply the money factor by 2400. A lower money factor means a lower interest charge and a cheaper lease.

What is residual value?

The residual value is the estimated value of the car at the end of the lease term. It's set by the leasing company and is a key factor in determining your monthly payment. A higher residual value means the car is expected to depreciate less, which results in a lower monthly payment for you.

Is it better to lease or buy a car?

Leasing typically results in lower monthly payments compared to buying, allowing you to drive a new car every few years. However, you don't own the car and have mileage restrictions. Buying a car means higher payments initially, but you build equity and own the asset outright once the loan is paid off, with no mileage limits. The best choice depends on your financial situation and driving habits.

How can I lower my monthly lease payment?

To lower your lease payment, you can: 1) Make a larger down payment (this is called a cap cost reduction). 2) Choose a vehicle known for having a high residual value. 3) Negotiate a lower capitalized cost (the vehicle's price). 4) Find a lease promotion with a lower money factor (interest rate).

What fees are involved in a car lease?

Common lease fees include an acquisition fee (an administrative charge to start the lease), a disposition fee (paid at the end if you don't purchase the car), and potential charges for excess wear and tear or for driving over your mileage limit. Always read the fine print to understand all potential costs.