Lease Payment Calculator
Estimate your monthly car lease payment with money factor, residual & tax
Figures are estimates. Actual lease offers may include acquisition fees, disposition fees, and local incentives.
📘 Understanding Your Lease Calculation
Learning how lease payments are built puts you in control. Here’s the exact formula used by the calculator and what every term means.
📋 Step-by-Step: How to Calculate a Car Lease Payment
- Capitalized Cost = Negotiated Price – Down Payment
- Residual Value = MSRP × (Residual % / 100)
- Monthly Depreciation = (Cap Cost – Residual) ÷ Lease Term
- Monthly Finance Charge = (Cap Cost + Residual) × Money Factor
- Pre-Tax Monthly Payment = Depreciation + Finance Charge
- Total Monthly Payment = Pre-Tax Payment × (1 + Sales Tax Rate)
💡 What Is Money Factor?
Money factor is the lease equivalent of an interest rate. It’s a small decimal (like 0.00125). To convert money factor to a familiar APR, multiply by 2400.
Example: 0.00125 × 2400 = 3.00% APR. The lower the money factor, the less you pay in finance charges.
🚗 Lease vs. Buy: Quick Perspective
Leasing often yields lower monthly payments because you only pay for the vehicle’s depreciation during the lease term, plus interest. However, at the end you do not own the car. Use the total lease cost to compare with financing the same vehicle.
❓ Frequently Asked Questions
How do you calculate a monthly lease payment?
Monthly lease payment = (Capitalized Cost – Residual Value) ÷ Lease Term + (Capitalized Cost + Residual Value) × Money Factor. Then add sales tax to get the final payment.
What is a good money factor?
A money factor below 0.00125 (3% APR) is generally considered competitive. Special lease deals can go as low as 0.00001 – but always multiply by 2400 to see the true interest rate.
Can I negotiate the residual value?
Residual value is set by the leasing company based on the car’s predicted future worth and is usually non-negotiable. However, you can negotiate the capitalized cost (vehicle price) just like a purchase.
