Auto Lease Calculator

A lease payment has two parts. The depreciation fee spreads the value the car loses over the lease — (cap cost − down − residual) ÷ term in months. The finance (rent) fee is (cap cost − down + residual) × money factor. Add them for the base payment, then add sales tax on that payment. On a $40,000 car with 58% residual, a 0.00250 money factor, 36 months and $3,000 down, that is $383.33 depreciation + $150.50 rent = $533.83, or about $571 a month with 7% tax.

The money factor is the lease version of an interest rate, written as a small decimal like 0.00250. Multiply it by 2400 to get the equivalent APR, and divide an APR by 2400 to get the money factor — so 0.00250 is a 6% APR and a 6% APR is 0.00250. The rate a dealer offers usually tracks your credit score, so a stronger score earns a lower money factor. This calculator does the conversion live, so you can type whichever number the dealer quotes and instantly see the other.

Residual value is what the leasing company expects the car to be worth at the end of the lease, usually quoted as a percent of MSRP (commonly 45–60% for 36 months). A higher residual means the car depreciates less while you have it, so your depreciation fee — and your monthly payment — go down. The residual is also your buyout price if you choose to purchase the car at lease end.

Capitalized cost, or cap cost, is the agreed price of the vehicle being leased — the negotiated selling price plus any fees rolled in. A cap cost reduction is anything that lowers it up front: a cash down payment, a trade-in, or a manufacturer rebate. In this calculator the down-payment field acts as your cap cost reduction, lowering both the depreciation and the finance portions of the payment. Negative equity works the other way — if you roll an old loan balance into the lease it raises the cap cost, so add it to the vehicle price rather than the down payment.

Often not. Money down on a lease lowers the monthly payment but buys you no equity, and if the car is totaled or stolen early, that up-front cash is usually gone — gap coverage only pays off the lease balance, not your down payment. Many shoppers put little or nothing down and pay a slightly higher monthly instead. Try both in the calculator to see the trade-off.

In most US states you pay sales tax on each monthly lease payment rather than on the full value of the car, which is one reason leasing can feel cheaper up front than buying. A few states tax the full or capitalized cost at signing instead. This calculator applies your entered rate to the monthly payment (the common method); enter 0% if your situation is different.