Car Lease Calculator
Estimate your monthly lease payment with MSRP, residual value, money factor, and fees
Lease Details
Typically 50-65% for a 36-month lease
Money Factor × 2400 = APR equivalent
Applied to each monthly payment (varies by jurisdiction)
Lease Payment Summary
Monthly Lease Payment
$415.18
Net Cap Cost
$31.89K
Residual Value
$19.25K
APR Equivalent
3.00%
Money Factor
0.00125
Payment Breakdown
Total Lease Cost
Complete Guide to Car Lease Calculations
What Is a Car Lease?
A car lease is a long-term rental agreement where you pay for the vehicle's depreciation during the lease term rather than its full purchase price. At the end of the term — typically 24 to 48 months — you return the car to the dealer or exercise a purchase option at the pre-set residual value.
Leasing often results in lower monthly payments than buying because you only finance the depreciation portion plus interest. However, you build no equity and face mileage limits (usually 10,000-15,000 miles per year). Compare with our Auto Loan Calculator to see the buying alternative side by side.
Lease Payment Formula
Monthly Lease Payment:
Net Cap Cost = Negotiated Price − Down Payment − Trade-In + Fees
Residual Value = MSRP × Residual %
Monthly Depreciation = (Net Cap Cost − Residual) ÷ Term
Monthly Finance Charge = (Net Cap Cost + Residual) × Money Factor
Monthly Payment = Depreciation + Finance Charge + Tax
Where: Money Factor × 2,400 = APR equivalent. Net Cap Cost is also called "adjusted capitalized cost."
Benefits of Calculating Before You Lease
Payment Transparency
Understand exactly how depreciation, finance charges, and fees contribute to your monthly payment — no dealer surprises.
Money Factor Awareness
Convert between money factor and APR to compare lease financing with loan rates. Use our Loan Amortization Calculator for the loan comparison.
Negotiation Leverage
Know the residual and money factor before walking into the dealership. These are the two numbers that most affect your payment — and both are negotiable.
Total Cost Clarity
See the full out-of-pocket cost over the lease term, including down payment, taxes, and fees — not just the advertised monthly payment.
Tips for Getting the Best Lease Deal
Negotiate the sale price first: The money factor and residual are set by the leasing company, but the negotiated (capitalized) price is between you and the dealer. A lower cap cost directly reduces every monthly payment. Check our Car Affordability Calculator to set your budget first.
Target high-residual vehicles: Cars and trucks with strong resale value have higher residual percentages, meaning less depreciation and lower payments. Luxury brands often subsidize residuals on popular models.
Match your mileage: Standard leases include 10,000-15,000 miles per year. Exceeding the limit costs $0.15-$0.30 per mile at turn-in. If you drive more, negotiate a higher mileage allowance upfront — it's cheaper than paying excess mileage penalties.
Common Car Lease Mistakes
Paying Too Much Down on a Lease
A large down payment lowers monthly payments but does not reduce total finance charges. Worse, if the vehicle is totaled, gap insurance covers the lease balance but you lose the cash you put down. Keep down payments under one month's payment.
Ignoring the Money Factor
Dealers rarely volunteer the money factor and may quote a "lease rate" that obscures the true cost of financing. Always ask for the money factor and multiply by 2,400 to get the APR. A difference of 0.0005 in money factor adds roughly $30-$40/month on a $35,000 vehicle.
Leasing Longer Than the Warranty
Extending a lease beyond the manufacturer's bumper-to-bumper warranty (typically 36 months) exposes you to repair costs on a car you do not own. Stick to 36 months or ensure the lease term falls within the factory warranty period.
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OpenFrequently Asked Questions
How is a car lease payment calculated?
A lease payment has two parts: depreciation and finance charge. Monthly Depreciation = (Net Cap Cost − Residual Value) ÷ Lease Term. Monthly Finance Charge = (Net Cap Cost + Residual Value) × Money Factor. For example, a $33,000 negotiated price with 55% residual on a 36-month lease at 0.00125 MF gives roughly $464/month before tax.
What is a money factor and how does it relate to APR?
A money factor is the lease equivalent of an interest rate, expressed as a small decimal (e.g., 0.00125). To convert to an APR: multiply by 2,400. So 0.00125 × 2,400 = 3.0% APR. Lower money factors mean lower finance charges. Dealers sometimes quote money factor as a larger number (1.25) — divide by 1,000 to get the true factor.
What is residual value and why does it matter?
Residual value is the projected worth of the vehicle at lease end, set as a percentage of MSRP by the leasing company. A higher residual (55-65%) means you depreciate less of the car during the lease, resulting in lower monthly payments. Vehicles with strong resale value — like certain trucks and SUVs — tend to have higher residuals.
Should I make a large down payment on a lease?
Unlike buying, large down payments on leases are generally discouraged. A down payment lowers monthly payments but does not reduce the total finance charges. If the car is totaled or stolen early in the lease, gap insurance typically covers the remaining lease balance but you lose the down payment. Keep it minimal — just enough to cover the first month and fees.
How does this compare to the Auto Loan Calculator?
The Auto Loan Calculator estimates payments for purchasing a vehicle with a traditional amortizing loan — you build equity and own the car at payoff. This Car Lease Calculator uses depreciation-plus-finance-charge math specific to leasing — you return the car at term end. Leasing typically has lower monthly payments but no ownership equity.
What fees are typically included in a car lease?
Common lease fees include the acquisition fee ($595-$1,095, charged by the leasing company to originate the lease), disposition fee ($300-$500, due at lease return), and documentation fees ($100-$500, varies by dealer and state). Only the acquisition fee is capitalized into the lease; disposition fees are paid at turn-in. Enter acquisition and doc fees in the Dealer Fees field.