Auto Lease Calculator

MSRP ($)

$

MSRP must be a positive number.

Negotiated Price / Cap Cost ($)

$

Negotiated price must be a positive number.

Down Payment / Trade-In ($)

$

Must be a non-negative number.

Acquisition Fee ($)

$

Roll into lease payments

Must be a non-negative number.

Lease Term (Months) Lease term must be a positive number.

Sales Tax Rate (%) Must be a non-negative number.

Residual Value

Must be a valid non-negative number.

Interest Rate

Must be a valid non-negative number.

Other Fees (Due at Signing)

$

Must be a non-negative number.

Results

Monthly Payment (with Tax)

$0.00

Monthly Depreciation $0.00

Monthly Finance Charge $0.00

Total Drive-Off Cost $0.00

Total Lease Cost $0.00

What is a Car Lease?

A car lease is essentially a long-term rental agreement. Instead of buying a car, you pay to use it for a fixed period, typically 24, 36, or 48 months. Your monthly payment covers the vehicle's depreciation—the difference between its initial value and its projected value at the end of the lease—plus a financing charge (money factor). At the end of the term, you can return the car, purchase it for its residual value, or lease a new one.

How Lease Payments Work

Your monthly lease payment is determined by three main components:

• Depreciation Charge: This is the largest part of the payment. It's calculated by taking the vehicle's net price (the negotiated price, also called Capitalized Cost), subtracting its estimated end-of-lease value (the Residual Value), and dividing the result by the number of months in the lease.
• Finance Charge: This is the interest you pay for the lease. It's calculated using a formula involving the net price, the residual value, and the Money Factor.
• Sales Tax: Sales tax is applied to the sum of the depreciation and finance charges. Tax rules can vary by state, but this is the most common method.

FAQs

What is a Money Factor in a car lease? The Money Factor (MF) represents the financing cost. It's a small decimal (e.g., 0.00125). To find its equivalent interest rate (APR), multiply the Money Factor by 2400. In this example, 0.00125 x 2400 = 3% APR.

What is Residual Value? The Residual Value is the car's predicted wholesale value at the end of the lease, expressed as a percentage of the MSRP or a fixed dollar amount. A higher residual value is better for you, as it means the car depreciates less, leading to lower monthly payments.