How the car lease calculator works
A lease payment has two parts: depreciation, what you pay for the value the car loses while you drive it, and a finance charge, the cost of borrowing. Enter the vehicle price, your down payment, the residual value, the money factor, the term, and your sales tax, and the tool estimates your monthly payment and the total cost of the lease.
Understanding the inputs
Residual value is what the car is predicted to be worth at lease end, set by the leasing company as a percentage of price; a higher residual lowers depreciation and your payment. The money factor is the lease equivalent of an interest rate, and multiplying it by 2400 gives an approximate APR. A down payment, sometimes called a capitalized cost reduction, lowers the amount financed.
How the payment is built
Monthly depreciation is the adjusted price minus the residual, divided by the term. The monthly finance charge is the adjusted price plus the residual, times the money factor. Adding them gives the pre-tax payment, and sales tax is applied on top in most states. The tool shows each component so you can see what drives the number.
Use it to compare offers
Change the residual, money factor, or down payment to see how each affects the monthly cost, and compare dealer quotes on equal terms. This is a simplified estimate that excludes acquisition and disposition fees, registration, and manufacturer incentives, and it is not financial advice; confirm the exact figures on your lease agreement.
Frequently asked questions
How is a lease payment calculated? Monthly depreciation plus a monthly finance charge, then sales tax on top in most states.
What is a money factor? The lease version of an interest rate; multiply by 2400 for an approximate APR.
Does a bigger down payment lower the payment? Yes, it reduces the amount financed, but you lose it if the car is totaled early.