Calculate monthly car lease payments. Break down depreciation, finance charges, and taxes with money factor comparison, term analysis, and due-at-signing totals.
Leasing a car means paying for depreciation rather than the full purchase price, but the math is notoriously confusing. Unlike a loan, lease payments are driven by the money factor (interest), residual value (predicted future value), and the negotiated capitalized cost — terms designed to obscure the true cost.
Your monthly lease payment has three components: depreciation (the difference between the negotiated price and residual value, divided by months), a finance charge (based on the money factor, which is essentially interest), and sales tax. The money factor looks tiny — 0.00150 seems like nothing — but multiply by 2400 to get the equivalent APR of 3.6%. That conversion is crucial for comparison shopping.
This calculator breaks down every cent of your lease payment, showing exactly how much goes to depreciation, finance charges, and tax. It compares different lease terms (24 to 48 months), different money factors (interest rates), and shows your total cost of leasing including the often-forgotten due-at-signing amount. Use it before walking into a dealership to know exactly what you should be paying.
Lease payments are intentionally complex. This calculator strips away dealership jargon and shows you exactly what you're paying — and where your money goes — so you can negotiate with confidence. Keep these notes focused on your operational context. Tie the context to the calculator’s intended domain. Use this clarification to avoid ambiguous interpretation. Align this note with review checkpoints.
Monthly Depreciation = (Net Cap Cost − Residual Value) ÷ Term Monthly Finance Charge = (Net Cap Cost + Residual Value) × Money Factor Monthly Payment = (Depreciation + Finance) × (1 + Tax Rate) Effective APR = Money Factor × 2400 Net Cap Cost = Negotiated Price + Fees − Down − Trade − Rebates Residual Value = MSRP × Residual %
Result: Monthly Payment: $550 — Total Cost: $22,808 — APR: 3.6%
Residual = $42,000 × 50% = $21,000. Net cap cost = $39,500 + $900 fees − $3,000 down = $37,400. Depreciation = ($37,400 − $21,000) ÷ 36 = $455.56/mo. Finance = ($37,400 + $21,000) × 0.00150 = $87.60/mo. Pre-tax = $543.16. Tax at 8% = $43.45. Total = $586.61/mo.
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The money factor is the lease equivalent of an interest rate, expressed as a tiny decimal (like 0.00150). Multiply by 2400 to get the approximate APR: 0.00150 × 2400 = 3.6%. Dealers sometimes quote it as 1.5 (multiplied by 1000). Always ask for the actual money factor — dealers aren't required to disclose it in many states.
The predicted value of the car at lease end, expressed as a percentage of MSRP. A 50% residual on a $40,000 car means it's expected to be worth $20,000 after the lease. Higher residual = lower payment. Residuals are set by the bank, not the dealer, and aren't negotiable.
Generally NO. If the car is totaled or stolen, your insurance pays the bank — and your down payment is gone. Unlike a purchase, a lease down payment just pre-pays depreciation. Instead, negotiate a lower selling price to reduce the monthly payment without the risk.
You pay the excess mileage fee at lease return — typically $0.15-$0.30 per mile. Going 5,000 miles over at $0.25/mile = $1,250 penalty. If you expect higher mileage, negotiate a higher limit upfront (10,000 → 15,000 miles/year) — it's much cheaper than the penalty.
Leasing costs less per month but you never build equity. Over 10 years: leasing a new car every 3 years costs ~40-60% more than buying and keeping for 10 years. Leasing makes financial sense if you want a new car every 2-3 years anyway, need the tax deduction (business use), or want to minimize maintenance costs.
Absolutely. The negotiated price (capitalized cost) is the most important number in any lease. Negotiate it exactly like a purchase price — research invoice prices, get competing quotes, and aim for 4-8% below MSRP. Every $1,000 off the price saves roughly $28/month on a 36-month lease.