Auto Lease Calculator
- Updated
- Formula shown
- Free, no sign-up
Results
Monthly lease payment $471.29 for 36 months ($310.97 depreciation, $129.49 rent charge, $30.83 tax), $2,471 due at signing.
- Depreciation
- $11,195
- Rent charges
- $4,662
- Sales tax
- $1,110
- Fees
- $995
| Down payment | Monthly payment | Due at signing | Total lease cost |
|---|---|---|---|
| $0.00 | $536.09 | $536.09 | $19,299 |
| $1,000 | $503.69 | $1,503.69 | $19,133 |
| $2,000 (yours) | $471.29 | $2,471.29 | $18,967 |
| $3,000 | $438.89 | $3,438.89 | $18,800 |
| $4,000 | $406.50 | $4,406.50 | $18,634 |
| $5,000 | $374.10 | $5,374.10 | $18,468 |
Lease tax rules vary by state. This calculator taxes each monthly payment; ask the dealer how your state taxes leases, including any tax on the down payment or rebates. Check the money factor and residual on the lease contract.
How to use the auto lease calculator
- Enter the MSRP (sticker price) and the price you negotiated with the dealer, then the lease term in months.
- Add any down payment, rebates and trade-in. If you still owe money on the trade-in, enter the payoff amount.
- Enter the residual value as a percentage of MSRP or as an amount, and the money factor or its APR equivalent. Both come from the leasing company.
- Add the acquisition and documentation fees and choose whether they are added to the lease or paid at signing. Enter your sales tax rate.
Car lease payment formula
Depreciation fee = (adjusted cap cost − residual value) ÷ months
Rent charge = (adjusted cap cost + residual value) × money factor
Monthly payment = (depreciation fee + rent charge) × (1 + sales tax rate)
Money factor = APR ÷ 2400
A lease charges you for the part of the car you use up, the depreciation from the capitalized cost down to the residual value (what the car is expected to be worth at the end), spread evenly over the term. The rent charge is the finance cost. Adding the cap cost and the residual and multiplying by the money factor gives the same result as charging interest on the average amount you are financing, which is why the APR equivalent is the money factor times 2400 (×12 months ×100 for a percentage ×2 for the average).
Worked example
A car has an MSRP of $35,000 and you negotiate $32,500. The $995 of fees are added to the lease, giving a gross capitalized cost of $33,495; a $2,000 down payment brings it to $31,495. The residual is 58% of MSRP, $20,300, and the money factor is 0.00250 (6% APR) over 36 months.
Depreciation: ($31,495 − $20,300) ÷ 36 = $310.97. Rent charge: ($31,495 + $20,300) × 0.0025 = $129.49. The base payment is $440.46, and 7% sales tax adds $30.83, for a monthly payment of $471.29. You pay $2,471.29 at signing (the down payment and first month), and the lease costs $18,967 in all.
With nothing down the payment would be $536.09, and the total cost only $333 more, because a down payment mostly prepays depreciation. Negotiating the money factor down to 0.00125 (3% APR) would cut the payment to $402.02 and save $2,494 over the lease.
Money factor to APR
| Money factor | Equivalent APR |
|---|---|
| 0.00100 | 2.40% |
| 0.00125 | 3.00% |
| 0.00150 | 3.60% |
| 0.00175 | 4.20% |
| 0.00200 | 4.80% |
| 0.00250 | 6.00% |
| 0.00300 | 7.20% |
| 0.00350 | 8.40% |
| 0.00400 | 9.60% |
How the residual value changes the payment
The example lease with only the residual changed. A higher residual means less depreciation to pay for.
| Residual (% of MSRP) | Residual value | Monthly payment | Total lease cost |
|---|---|---|---|
| 50% | $17,500 | $547.02 | $21,693 |
| 55% | $19,250 | $499.69 | $19,989 |
| 58% | $20,300 | $471.29 | $18,967 |
| 60% | $21,000 | $452.36 | $18,285 |
| 65% | $22,750 | $405.03 | $16,581 |
Tips for a better lease
- Negotiate the price, not the payment. The capitalized cost is negotiable just like a purchase price, and every dollar off lowers both fees.
- Ask for the money factor. Dealers sometimes quote a marked-up rate. Multiply it by 2400 to compare it with loan APRs.
- Be wary of big down payments. If the car is stolen or written off early, gap coverage usually pays the leasing company, and money you put down may not come back.
- Check the mileage allowance. The residual assumes a set number of miles a year; going over costs a per-mile charge at the end.
- Taxes vary by state. Most leases tax the monthly payment, but rules on taxing down payments, rebates and fees differ. Your contract shows the actual amounts.
Thinking of buying instead? Compare with the auto loan calculator, or see whether a dealer rebate beats a low APR with the cash back or low interest calculator. For equipment and business leases, use the lease calculator.
Frequently asked questions
How is a car lease payment calculated?
Add a depreciation fee, (adjusted cap cost − residual) ÷ months, and a rent charge, (adjusted cap cost + residual) × money factor, then add sales tax. For a $32,500 car with $995 fees, $2,000 down, a $20,300 residual, a 0.00250 money factor and 36 months, that is $310.97 + $129.49 + 7% tax = $471.29 a month.
How do I convert a money factor to an APR?
Multiply the money factor by 2400. A money factor of 0.00250 is a 6% APR, and 0.00125 is 3%. To go the other way, divide the APR by 2400.
What is a residual value?
The car’s expected value at the end of the lease, set by the leasing company as a percentage of MSRP for your term and mileage. It is also the price at which you can usually buy the car at lease end. A higher residual means a lower payment.
Should I put money down on a lease?
A down payment lowers the monthly payment but barely lowers the total cost: in the example, $2,000 down cuts the payment from $536.09 to $471.29, yet saves only about $333 in total. If the car is written off early, that money may not come back.
Is sales tax charged on a car lease?
Usually, but rules vary by state. Many states tax each monthly payment, and some also tax the down payment, rebates or fees, or tax differently. This calculator applies your rate to each monthly payment; check your contract for the exact amounts.