Monthly Lease Payment
$535
APR Equivalent
3.00%
Total Payments
$19.3k
Residual Value
$24.8k
Monthly Lease Payment
$535
APR Equivalent: 3.00%
Monthly Depreciation
$424
Monthly Finance
$81
Total Payments
$19,254
Residual Value
$24,750
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Lease payment = Depreciation + Finance Charge + Tax. Depreciation = (Cap Cost - Residual) ÷ Term. Finance = (Cap Cost + Residual) × Money Factor.
Money factor is the lease equivalent of interest rate, expressed as a decimal (e.g., 0.00125). Multiply by 2400 to get APR equivalent. Lower is better.
| Money Factor | APR Equivalent | Credit Tier |
|---|---|---|
| 0.00050 | 1.2% | Excellent (740+) |
| 0.00100 | 2.4% | Very Good (700–739) |
| 0.00125 | 3.0% | Good (670–699) |
| 0.00200 | 4.8% | Fair (620–669) |
| 0.00300 | 7.2% | Subprime (below 620) |
Residual is the car's predicted value at lease end, as % of MSRP. Higher residual = lower payment. It's also the buyout price if you want to purchase the car.
Generally no. Unlike buying, down payments on leases are lost if the car is totaled or stolen. Instead, negotiate cap cost reduction or use money for first payment + fees.
Cap cost is the negotiated price you're financing. Cap cost reduction (like a down payment) lowers this amount. Negotiate the selling price before discussing lease terms.
Lease: Lower payments, new car every 2-3 years, no resale hassle. Buy: Build equity, no mileage limits, can modify, lower long-term cost if you keep cars 5+ years.
| Factor | Lease | Buy |
|---|---|---|
| Monthly payment | Lower (depreciation only) | Higher (full price) |
| Ownership at end | Return car | Own outright |
| Mileage limits | 10K–15K/year | None |
| Maintenance | Under warranty | Your responsibility |
| Long-term cost (10 yr) | Higher (continuous payments) | Lower (no payments after payoff) |
Inputs
Result
Residual = $45,000 x 55% = $24,750. Net Cap Cost = $42,000 - $2,000 = $40,000. Monthly Depreciation = ($40,000 - $24,750) / 36 = $423.61. Finance = ($40,000 + $24,750) x 0.00125 = $80.94. Base = $504.55. With 6% tax = $534.82, displayed as $535.
Inputs
Result
Residual = $35,000 x 60% = $21,000. Net Cap Cost = $33,000 - $1,000 - $5,000 = $27,000. Monthly Depreciation = ($27,000 - $21,000) / 36 = $166.67. Finance = ($27,000 + $21,000) x 0.001 = $48.00. Base = $214.67. With 7% tax = $229.69, displayed as $230.
Monthly Depreciation = (Net Cap Cost - Residual Value) / Lease TermThe portion of each monthly payment that covers the vehicle losing value over the lease.
Where:
Net Cap Cost= Negotiated Price - Down Payment - Trade-InResidual Value= MSRP x Residual PercentageLease Term= Number of months in the leaseMonthly Finance = (Net Cap Cost + Residual Value) x Money FactorThe interest-equivalent charge on the lease, calculated using the money factor.
Where:
Net Cap Cost= Negotiated Price - Down Payment - Trade-InResidual Value= Predicted end-of-lease valueMoney Factor= Lease interest rate as a decimal (APR / 2400)Monthly Payment = (Monthly Depreciation + Monthly Finance) x (1 + Sales Tax Rate / 100)The total monthly lease payment including sales tax.
Where:
Monthly Depreciation= Depreciation portion of paymentMonthly Finance= Finance charge portion of paymentSales Tax Rate= State/local sales tax percentageRead our guide
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Last Updated: Mar 26, 2026
This calculator is provided for informational and educational purposes only. Results are estimates and should not be considered professional financial, medical, legal, or other advice. Always consult a qualified professional before making important decisions. UseCalcPro is not responsible for any actions taken based on calculator results.