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Auto Lease Calculator | Car Lease Payment Calculator

Calculate your monthly car lease payment and total lease cost based on vehicle price, residual value, money factor, and other lease terms.

Category: Financial

Vehicle Information

Lease Terms

Fees & Mileage

Lease Payment Results

Monthly Lease Payment:

$416.35

Payment Breakdown:

Depreciation:

$330.42

Finance Charge:

$62.37

Sales Tax:

$23.57

Total Lease Cost:

$18,234

Includes down payment, monthly payments, and all fees

Equivalent APR:

3.00%

Cost Per Mile:

$0.51

Understanding Auto Leases

Key Lease Terms

  • Money Factor: Similar to an interest rate. Multiply by 2400 to get the approximate APR.
  • Residual Value: The projected value of the vehicle at lease end.
  • Capitalized Cost: The negotiated price plus any fees and add-ons.
  • Disposition Fee: Charged when you return the vehicle at lease end.

Lease vs. Buy Considerations

  • Leasing typically offers lower monthly payments than buying and allows you to drive a new car every few years with warranty coverage.
  • Consider buying if you drive more than 15,000 miles per year.
  • Leasing allows you to drive a new car every few years.
  • Buying builds equity; leasing doesn't.

Frequently Asked Questions

How are car lease payments calculated?

Car lease payments consist of two main parts: the depreciation fee and the finance fee. The depreciation fee is the difference between the vehicle's negotiated price and its residual value, divided by the lease term. The finance fee is calculated by multiplying the money factor by the sum of the net capitalized cost and residual value. Additional fees and taxes are then added to determine the total monthly payment.

What is a money factor in car leasing?

The money factor is a decimal representation of the interest rate charged on a lease. To convert money factor to APR, multiply it by 2400. For example, a money factor of 0.00125 equals a 3% APR (0.00125 × 2400 = 3%). Lower money factors result in lower monthly payments, and they're typically based on your credit score and current market rates.

What is residual value and how does it affect my lease?

Residual value is the projected worth of the vehicle at the end of the lease term, expressed as a percentage of the MSRP. A higher residual value means the vehicle is expected to retain more of its initial value, resulting in lower monthly payments. Luxury vehicles and models with strong resale values typically have higher residual percentages, making them more affordable to lease.

Should I lease or buy a car?

Leasing typically offers lower monthly payments than buying and allows you to drive a new car every few years with warranty coverage. However, buying builds equity, has no mileage restrictions, and is usually more economical long-term. Consider leasing if you prefer driving newer vehicles, want lower payments, drive less than 15,000 miles annually, and don't mind not owning the vehicle. Buy if you drive many miles, want to build equity, plan to keep the car long-term, or want to customize it.