An auto lease calculator estimates a car lease payment by adding the monthly depreciation to a rent charge based on the money factor. Formula: pay = (cap-residual)/months + (cap+residual)×((APR/100)/24), cap = MSRP-down. A $35,000 car with a $20,000 residual, $2,000 down, a 3.5% rate and 36 months costs about $438.40 a month before tax.
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How to use the auto lease calculator
- Enter the negotiated price (capitalized cost).
- Enter the residual value from the lease offer.
- Enter any down payment or rebate.
- Enter the rate as an APR-style percentage (money factor × 2,400) and the term.
What formula does the auto lease calculator use?
- Adjusted capitalized cost = vehicle price − down payment or other cap cost reduction
- Depreciation charge = (adjusted cap cost − residual value) ÷ months
- Money factor = rate ÷ 2,400 (for example 3.5% ÷ 2,400 = 0.00146)
- Rent charge = (adjusted cap cost + residual) × money factor
- Monthly payment before tax = depreciation charge + rent charge
These terms match the disclosures a lessor must give under Regulation M, which lists the gross capitalized cost, capitalized cost reduction, residual value, depreciation and rent charge.
Auto lease calculator worked example
| Price | Residual | Down | Rate | Money factor | Months | Payment |
|---|---|---|---|---|---|---|
| $35,000 | $20,000 | $2,000 | 3.5% | 0.00146 | 36 | $438.40 |
| $35,000 | $20,000 | $0 | 3.5% | 0.00146 | 36 | $496.88 |
| $35,000 | $20,000 | $2,000 | 6% | 0.00250 | 36 | $493.61 |
| $35,000 | $17,500 | $2,000 | 3.5% | 0.00146 | 48 | $396.56 |
| $45,000 | $27,000 | $3,000 | 4.8% | 0.00200 | 36 | $554.67 |
A $35,000 car with a $20,000 residual, $2,000 down, a 3.5% rate and a 36-month term has an adjusted cap cost of $33,000. Depreciation is $13,000 ÷ 36 = $361.11 a month and the rent charge is $53,000 × 0.0014583 = $77.29, for a payment of about $438.40 before sales tax.
What you can negotiate
- Price: the capitalized cost can be negotiated like a purchase price, and it has the biggest effect on the payment.
- Money factor: ask for it as a decimal and multiply by 2,400 to compare it with loan rates.
- Fees: acquisition fees and dealer add-ons are often added to the capitalized cost.
- Residual: usually set by the leasing company; a higher residual lowers the payment.
Down payments on a lease
In the auto lease calculator, a large down payment lowers the monthly figure but does not save much rent charge, and if the car is stolen or written off early, the insurance payout normally goes to the lessor, so that money may not come back. Many shoppers put little or nothing down for this reason.
Costs at the end of the lease
Check the yearly mileage allowance and the charge per extra mile, the standard for excess wear, any disposition fee and the price to buy the car at the end. Sales tax rules for leases vary by state; many tax each monthly payment, and some tax the full price up front.
Estimates for education only, not financial advice. Your lender’s figures are final.
Leasing or buying
A lease payment is usually lower than a loan payment on the same car because you pay only for the part of the value used during the term, plus rent charge. At the end, though, you own nothing, and starting a new lease means a new set of fees. Buying costs more each month but the payments end and the car is yours. Use the auto lease calculator and an auto loan calculator with the same price, rate and down payment to compare total cost over the period you expect to keep the car.
Leasing tends to suit drivers who stay under the mileage limit, keep the car in good condition and like to change cars every few years. Drivers who cover long distances, are hard on cars or keep vehicles for a long time usually pay less overall by buying.
Checking a dealer’s lease offer
Advertised lease deals often assume a specific trim, a down payment and a short mileage allowance. Ask the dealer for the capitalized cost, residual, money factor, term, fees and miles per year, enter them in the auto lease calculator, and compare the result with the quoted payment. If the quoted payment is higher, ask what extra charges or products are included.
Related converters and calculators
Related calculators:
- Auto loan calculator: buying
- Lease calculator: leases
- Sales tax calculator: tax
- APR calculator: rates
Near the end of a lease? The lease buyout calculator compares the buyout price with market value.
Sources
eCFR: Regulation M, 12 CFR 213.4 lease disclosures.
Questions about this calculator
How is a car lease payment calculated?
Depreciation ÷ months plus (cap cost + residual) × money factor.
How do I convert a money factor to a rate?
Multiply by 2,400. 0.00146 is about 3.5%.
What is a residual value?
The car’s estimated value at the end of the lease.
Should I put money down on a lease?
A large down payment can be lost if the car is totaled early.
Does the payment include tax?
No. Add your state’s lease tax.
Check the assumptions and units before relying on a result. Financial, tax and health estimates do not replace advice for your individual circumstances.
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