Calculate your monthly car lease payment including depreciation, finance charge, and tax. Enter MSRP, residual, money factor, and term to see your cost.
A car lease payment is calculated differently from a loan payment. Instead of paying down the full purchase price, you pay for the vehicle's depreciation during the lease term plus a finance charge (similar to interest). This typically results in lower monthly payments compared to buying.
The key components of a lease payment are the negotiated price (capitalized cost), residual value (what the car is projected to be worth at lease end), money factor (the financing rate), and lease term. Understanding these components helps you evaluate whether a lease deal is fair.
This calculator breaks down every element of the lease payment so you can see exactly what you're paying for depreciation, financing, and taxes each month.
Whether you drive a compact sedan, a full-size SUV, or a pickup truck, accurate lease payment figures help you plan smarter and avoid costly surprises at the pump or dealership. Use this tool regularly to track changes over time and adjust your transportation budget accordingly.
Lease payments have many hidden components. Without a calculator, it's nearly impossible to verify whether the dealer's quoted payment is fair. This tool lets you check the math and negotiate from a position of knowledge. Results update instantly as you adjust inputs, making it easy to explore different scenarios and find the best option for your driving needs and budget.
Residual Value = MSRP × Residual % Net Cap Cost = Sale Price + Fees − Down Payment Depreciation Fee = (Net Cap Cost − Residual) / Term Finance Fee = (Net Cap Cost + Residual) × Money Factor Pre-Tax Payment = Depreciation Fee + Finance Fee Monthly Payment = Pre-Tax Payment × (1 + Tax Rate)
Result: $461.48/month
Residual = $40,000 × 55% = $22,000. Net cap cost = $38,000 + $895 − $2,000 = $36,895. Depreciation: ($36,895 − $22,000) / 36 = $413.75. Finance charge: ($36,895 + $22,000) × 0.00125 = $73.62. Pre-tax: $487.37. With 7% tax: $461.48 (tax on depreciation only in most states).
Every lease payment consists of two parts: the depreciation fee (what the car loses in value during your term) and the finance fee (the cost of borrowing). The depreciation portion is typically 70–80% of the payment, making the negotiated price and residual the most important factors.
Many dealers mark up the money factor by 0.0003–0.001, which translates to 0.72–2.4% APR. Ask for the base (buy rate) money factor and negotiate from there. Customers with excellent credit can often get the base rate.
When comparing lease deals, calculate total cost: (monthly × term) + down payment + fees. This gives the true cost of the lease. Don't compare monthly payments alone, as higher down payments artificially lower the monthly figure.
The money factor is the lease equivalent of an interest rate. It's expressed as a small decimal (e.g., 0.00125). To convert to APR, multiply by 2,400. So 0.00125 × 2,400 = 3.0% APR.
A residual of 55–65% after 36 months is excellent. It means the car holds its value well. Lower residuals (40–50%) result in higher payments because you're paying for more depreciation.
Financial advisors generally recommend minimal down payment on a lease. If the car is totaled or stolen, you lose your down payment. Keep it to $0–$2,000 and focus on reducing the cap cost instead.
Negotiate three separate components: the sale price (cap cost) — lower is better; the money factor — lower is better; and any dealer fees. The residual is set by the manufacturer and is non-negotiable.
Common lease fees include acquisition fee ($595–$1,095), documentation fee, registration, first month payment, security deposit (sometimes waived), and taxes. Ask for a complete fee breakdown.
Leasing has lower monthly payments but you own nothing at the end. Over multiple lease cycles, it's more expensive than buying and keeping a car long-term. Leasing is better for those who want a new car every 2–3 years.