🚗 Auto Lease Calculator
Note: Calculations are performed in your selected currency.
Tip: Money Factor = APR / 2400. A factor of 0.002 is roughly 4.8% APR.
📘 How This Auto Lease Calculator Works
This calculator provides a detailed estimate of your monthly car lease payment using the standard industry formula. It breaks down your payment into its core components so you can understand exactly what you're paying for.
The Lease Payment Formula:
- Depreciation Fee: (Capitalized Cost - Residual Value - Down Payment) / Lease Term
- Finance Fee: (Capitalized Cost + Residual Value) × Money Factor
- Base Monthly Payment: Depreciation Fee + Finance Fee
- Monthly Payment with Tax: Base Monthly Payment × (1 + Sales Tax Rate)
The Money Factor is a decimal number that represents the financing portion of your lease payment. You can convert an APR to a Money Factor by dividing by 2400 (e.g., 4.8% APR = 0.002 Money Factor).
The Residual Value is the estimated value of the vehicle at the end of the lease term, set by the leasing company. A higher residual value means lower monthly payments.
❔ Frequently Asked Questions
What is capitalized cost in a car lease?
The capitalized cost (or "cap cost") is the negotiated selling price of the vehicle plus any additional fees that are rolled into the lease (such as acquisition fees, documentation fees, or taxes). It's essentially the initial amount being financed by the lease. You can often negotiate this price lower, just like when buying a car.
What is residual value and how is it determined?
The residual value is the estimated value of the vehicle at the end of the lease term. It is set by the leasing company (often the manufacturer's financial arm) based on the vehicle's expected depreciation. It is a percentage of the Manufacturer's Suggested Retail Price (MSRP). A higher residual percentage means the car is expected to hold its value better, resulting in a lower monthly payment.
What is the money factor? How do I find it?
The money factor is the interest rate used in the lease calculation. It is usually a very small decimal number (e.g., 0.00125, 0.002). You can convert it to a more familiar APR by multiplying by 2400 (e.g., 0.002 * 2400 = 4.8% APR). Dealers are sometimes hesitant to disclose this number, but you have the right to know it before signing a lease.
Is it better to put money down on a lease?
Putting money down (a "cap cost reduction") will lower your monthly payment. However, it is generally not recommended for leases. If the car is stolen or totaled early in the lease, you may not get that down payment back from insurance. It's often safer to take the higher monthly payment and keep your cash in savings.
What fees are not included in this calculation?
This calculator focuses on the core monthly payment. It does not include potential upfront costs due at signing, such as the first month's payment, security deposit, registration, title fees, or any other local taxes or fees. Always get a detailed "lease quote" from the dealer for the full picture.
Should I lease or buy a car?
Leasing is often attractive if you:
- Want a lower monthly payment for the same car.
- Prefer to drive a new car every few years.
- Don't drive more than the annual mileage limit (typically 10,000-15,000 miles).
- Want to avoid long-term maintenance costs after the warranty expires.
- Plan to keep the car for more than 5-6 years.
- Drive a high number of miles annually.
- Want to build equity in an asset.
- Prefer not to have restrictions on vehicle modifications or wear and tear.