Auto Lease Calculator
Enter the MSRP, the residual value as a percentage of MSRP, the money factor, the term in months, your down payment, the acquisition fee and your sales tax rate. If you negotiated a lower price or have a car to trade in, enter those too. The calculator shows the monthly payment with tax, the total lease cost, the cap cost, the APR equivalent of the money factor, the residual value, and the monthly depreciation and finance charge that make up the payment before tax.
Negative if you owe more on the car than it is worth.
How to use the Auto Lease Calculator
- Enter your numbers in the Auto Lease Calculator above.
- Press the Calculate button to see the result.
- To try other numbers, change any value and press the button again.
The auto lease formula
Payment = (Depreciation + Finance charge) × (1 + tax) · · · Depreciation = (Cap cost − Residual) / Term · · · Finance = (Cap cost + Residual) × MF
The cap cost is the negotiated price minus the down payment and trade-in, plus the acquisition fee. With the price field empty, the price is the MSRP. Residual is always the MSRP times the residual percentage, so a lower price does not lower it, and the APR equivalent is MF × 2400. Sales tax goes on the monthly payment. The total lease cost is the taxed payment times the term, plus the down payment and the trade-in.
Worked example
A $40,000 MSRP with a 60% residual ($24,000), $5,000 down, no acquisition fee, money factor 0.0025, a 36-month term and 0% tax. The cap cost is $35,000. Depreciation = ($35,000 − $24,000) / 36 = $305.56 and finance = ($35,000 + $24,000) × 0.0025 = $147.50, so the payment is $453.06 a month. The calculator shows an APR equivalent of 6% and a total lease cost of $21,310.00. Now negotiate the price down to $38,000 and bring a $3,000 trade-in. The cap cost falls to $38,000 − $5,000 − $3,000 = $30,000 and the residual stays at $24,000, because it is set on the MSRP. Depreciation falls to $166.67 and finance to $135.00, so the payment is $301.67 and the total lease cost is $18,860.00.
Frequently asked questions
How does a trade-in change a car lease payment?
The calculator takes the trade-in value off the cap cost, as it does a down payment, and adds it to the total lease cost, because it is value you hand over. In the example, $3,000 of trade-in and a price $2,000 under MSRP take the payment from $453.06 to $301.67. If you owe more on your car than it is worth, enter the gap as a negative trade-in. It raises the cap cost, so you pay it off through the lease. The dealer's written offer has the real figure.
Why does a lower price not lower the residual?
The calculator sets the residual on the MSRP, and the price you negotiate only moves the cap cost. So each dollar off the price comes off the depreciation you pay for. Check your lease offer if it states the residual in dollars, and divide that by the MSRP to get the percentage for this field.
Does a trade-in lower the tax on a lease?
Not in this calculator. It taxes the monthly payment at your rate, so a trade-in lowers the tax only by lowering the payment. It does not know how your state treats a trade-in or tax on a lease.
What is the money factor?
The lease equivalent of an interest rate, written as a small decimal. To approximate the APR, multiply by 2400. A money factor of 0.0030 corresponds to about 7.2% APR.
What does residual value mean?
The car's predicted value at lease end, set by the leasing company. Higher residual = lower depreciation portion = lower monthly payment. Here you enter it as a percentage of the MSRP.
Does the payment include sales tax?
Yes. The calculator multiplies the payment before tax by 1 plus your sales tax rate, so 8% turns $473.24 into $511.10. It puts no tax on the down payment or the acquisition fee. Enter 0% to see the payment before tax.
Should I lease or buy?
That depends on what the car is worth at the end, how far you drive and how long you keep it, and this calculator does not know those. The Lease vs buy mode of the lease calculator puts both on the same months with your figures.