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Car Lease Calculator

Calculate your car lease payment

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

Lease Cost Breakdown

Monthly Depreciation$424
Monthly Finance Charge$81
Total Lease Payments$19,254
Residual Value$24,750

Frequently Asked Questions

Q

How is a lease payment calculated?

Lease payment = Depreciation + Finance Charge + Tax. Depreciation = (Cap Cost - Residual) ÷ Term. Finance = (Cap Cost + Residual) × Money Factor.

Q

What is 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.

Q

What is residual value?

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.

Q

Should I put money down on a lease?

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.

Q

What is cap cost reduction?

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.

Q

Lease vs buy: which is better?

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.

Example Calculations

1$45,000 SUV Lease at 0.00125 Money Factor for 36 Months

Inputs

MSRP$45,000
Negotiated Price$42,000
Residual Value55%
Money Factor0.00125
Lease Term36 months
Down Payment$2,000
Sales Tax6%

Result

Monthly Lease Payment$535
Monthly Depreciation$424
Monthly Finance Charge$81
APR Equivalent3.00%
Residual Value$24,750

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.

2$35,000 Sedan Lease with Trade-In

Inputs

MSRP$35,000
Negotiated Price$33,000
Residual Value60%
Money Factor0.001
Lease Term36 months
Down Payment$1,000
Trade-In$5,000
Sales Tax7%

Result

Monthly Lease Payment$230
Monthly Depreciation$167
Monthly Finance Charge$48
APR Equivalent2.40%
Residual Value$21,000

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.

Formulas Used

Monthly Depreciation

Monthly Depreciation = (Net Cap Cost - Residual Value) / Lease Term

The portion of each monthly payment that covers the vehicle losing value over the lease.

Where:

Net Cap Cost= Negotiated Price - Down Payment - Trade-In
Residual Value= MSRP x Residual Percentage
Lease Term= Number of months in the lease

Monthly Finance Charge (Rent Charge)

Monthly Finance = (Net Cap Cost + Residual Value) x Money Factor

The interest-equivalent charge on the lease, calculated using the money factor.

Where:

Net Cap Cost= Negotiated Price - Down Payment - Trade-In
Residual Value= Predicted end-of-lease value
Money Factor= Lease interest rate as a decimal (APR / 2400)

Monthly Lease Payment

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 payment
Monthly Finance= Finance charge portion of payment
Sales Tax Rate= State/local sales tax percentage

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Last Updated: Feb 12, 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.

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