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Auto Lease Calculator

Enter the negotiated price, the MSRP, the residual value, the term and the money factor or APR. You get the monthly lease payment and what it is made of.

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Result

Estimate for information only, not professional advice. Last reviewed .

How we calculate it

The adjusted capitalized cost is the price plus any fees, minus the down payment and the trade-in. The residual value is the MSRP × the residual percentage. Each month you pay for the depreciation, (adjusted cost − residual) ÷ term, and a finance charge, (adjusted cost + residual) × the money factor. The money factor is the APR ÷ 2400. Tax is added to the sum.

For example, a 30,000 car with a 3,000 down payment has an adjusted cost of 27,000. A 60% residual on a 32,000 MSRP is 19,200. Over 36 months the depreciation is 216.67 and the finance charge is (27,000 + 19,200) × 0.0025 = 115.50. The base payment is 332.17, and with 7% tax it is 355.42.

Assumptions and limits

  • The money factor, residual value and fees come from the leasing company, so ask for them in writing. A mileage limit, wear charges and the end of lease fee are not included.
  • Sales tax on a lease differs by state and country. Some places tax the payment, others tax the whole price up front, so use the percentage that fits your place.
  • The finance charge uses the common money factor formula, which charges interest on the cost and the residual together.

Frequently asked questions

What is a money factor?

It is the lease version of an interest rate, written as a small decimal such as 0.0025. Multiply it by 2400 to get the approximate APR, so 0.0025 is 6%.

What is the residual value?

It is what the car is expected to be worth at the end of the lease, set by the lessor as a percentage of the MSRP. A higher residual means you pay for less depreciation, so the payment is lower.

Does a down payment make sense on a lease?

It lowers the monthly payment, but if the car is stolen or written off early you can lose that money. Many people prefer to put as little down as possible.

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Worked example (a fixed example using the starting numbers, it does not change as you type)

Inputs: Negotiated price = 30000; MSRP (sticker price) = 32000; Residual value (% of the MSRP) = 60; Lease term (months) = 36; You know the = Money factor; Money factor = 0.0025; Down payment (cap cost reduction) = 3000; Trade-in credit = 0; Fees added to the lease (acquisition fee) = 0; Sales tax on the payment (%) = 7.

  • Monthly payment $355.42
  • Base payment $332.17
  • Depreciation per month $216.67
  • Finance charge per month $115.50
  • Monthly sales tax $23.25
  • Adjusted capitalized cost $27,000.00
  • Residual value $19,200.00
  • Money factor 0.00250
  • Total of payments $12,795.06

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Last reviewed: . Formulas and assumptions are described on our methodology page. For information only; not professional advice.