Lease Calculator
Work out a monthly lease payment from the price, the residual value in percent, the money factor and the term in months. Add a negotiated price, a trade-in, a down payment, an acquisition fee and a sales tax rate, or leave them at 0 or empty. The fields use car lease names. To price equipment or another asset, enter its price as the MSRP. The Lease vs buy mode puts the lease next to buying on a loan over the same months. It shows what each side costs and the end value at which the two cost the same.
Negative if you owe more on the car than it is worth.
The lease
Buying with a loan
How to use the Lease Calculator
- Enter your numbers in the Lease Calculator above.
- Press the Calculate button to see the result.
- To try other numbers, change any value and press the button again.
The lease payment formula
Cap cost = price − down payment − trade-in + acquisition fee · · · Payment = ((Cap cost − Residual) / Term + (Cap cost + Residual) × MF) × (1 + tax rate)
The price is the negotiated price, or the MSRP if you leave that field empty. The residual is always the MSRP times the residual percentage. The first part of the payment is depreciation, the value you use up each month. The second is the finance charge, the money factor times the cap cost plus the residual. Sales tax goes on the sum of the two. The total lease cost is the monthly payment times the term, plus the down payment and the trade-in. The calculator works it out from the payment before rounding, so it can be some cents off the rounded payment times the term. The APR equivalent is the money factor times 2,400. Money figures are rounded to the cent. In the Lease vs buy mode, the lease cost is the total lease cost plus your end-of-lease charges. The buying cost is the down payment plus the loan payments made during the lease term plus the loan balance left, minus the value at the end. The loan is the price plus sales tax minus the down payment, as on the auto loan calculator.
Worked example
A $60,000 piece of equipment with a 30% residual ($18,000), leased for 48 months at a money factor of 0.0030, with no down payment, no fee and 0% tax. Depreciation = ($60,000 − $18,000) / 48 = $875.00 and finance = ($60,000 + $18,000) × 0.0030 = $234.00, so the payment is $1,109.00 a month. The calculator shows a total lease cost of $53,232.00 and an APR equivalent of 7.2%. Negotiate the price down to $56,000 and trade in $4,000 of old equipment and the cap cost is $52,000, while the residual stays $18,000. The payment falls to $918.33 and the total lease cost to $48,080.00. For Lease vs buy, take the figures the mode opens with: a $35,000 MSRP, 55% residual, money factor 0.00125, 36 months, $2,000 down, an $895 fee, 8% tax and $500 of end-of-lease charges. The lease payment is $511.10 and the lease cost is $20,899.45. Buying at $35,000 with $2,000 down leaves a $35,800.00 loan, which at 6.5% over 60 months costs $700.47 a month. After 36 months you have paid $27,216.92 and owe $15,724.43. With a value of $19,250 at the end, the buying cost is $23,691.35, so the purchase costs $2,791.90 more. The two match at an end value of $22,041.90.
Frequently asked questions
Can I use this lease calculator for equipment?
Yes, if the lease is priced with a residual value and a money factor. Enter the price in the MSRP field and the residual as a percentage of that price. It also takes a negotiated price and a trade-in, and it has no field for a purchase option at the end. The Lease vs buy mode has neither of those two fields. Enter a trade-in there as a down payment on both sides, which gives the same cap cost and the same total.
What is the money factor?
It sets the finance charge. Each month you pay the money factor times the cap cost plus the residual. The calculator also multiplies the money factor by 2,400 and shows the result as the APR equivalent, so 0.0030 shows as 7.2%.
Does the payment include sales tax?
Yes. The calculator multiplies the payment before tax by 1 plus your sales tax rate, so in the example 8% turns $1,109.00 into $1,197.72. It puts no tax on the down payment or the acquisition fee. Enter 0% to see the payment before tax.
What is in the total lease cost?
Every monthly payment plus the down payment and the trade-in. The acquisition fee is part of the cap cost, so it is already inside the payments. The total does not include the residual value or any charge at the end of the lease. In the example, 48 payments of $1,109.00 with nothing down come to $53,232.00.
Is leasing or buying cheaper?
The Lease vs buy mode shows it for your figures and gives no general answer, because the result depends most on the value at the end, which nobody knows yet. Look at End Value Where They Match and ask whether the car is likely to be worth more or less than that when the lease ends. If you would keep the car after the lease term, this comparison stops too early, because later months with no loan payment do not count.
What goes in end-of-lease charges?
Anything you expect to pay when you hand the car back. The CFPB says leases may charge for excess mileage and for wear and tear at the end, and that most leases limit you to 10,000 to 15,000 miles a year (page last reviewed September 12, 2023). Your lease contract has the amounts. Ending a lease early can cost more, and the calculator does not cover it.
What does the comparison leave out?
Insurance, repairs, registration, income tax and what your down payment could earn elsewhere. It also adds cash paid in different months without discounting. It uses one sales tax rate for both sides, and your state may tax a lease and a purchase differently. A cash purchase works too: enter the price plus tax as the buying down payment.