Auto Lease Calculator.

Guide

How to use the Auto Lease Calculator

A lease quote hides its moving parts behind one monthly number. This calculator pulls them back out.

1. Enter the MSRP from the window sticker, then the Negotiated price (the gross capitalized cost). The residual is figured from the MSRP; your payment from the negotiated price.
2. Enter any Down payment (the cap cost reduction), Trade-in equity and Rebates & incentives. All three reduce the amount you're leasing.
3. Enter the Residual value as a percent of MSRP, from the quote. The leasing company sets it; it isn't negotiable, but it's the biggest driver of the payment.
4. Enter the Money factor. If you were quoted an APR instead, type it in the …or APR field and the calculator converts it (APR = money factor × 2,400).
5. Set the Lease term in months and the Acquisition fee. Leave Roll the acquisition fee into the lease checked if it's being added to the lease rather than paid up front.
6. Enter your Sales tax rate and choose How your state taxes leases: Tax added to each monthly payment, Tax on the total of payments, paid up front, or Tax on the full selling price, paid up front.
7. Enter the Miles allowed per year, the Miles you expect to drive per year, and the Charge per extra mile. Overage lands in the total cost.
8. Read the headline Monthly payment, then the Depreciation part, Rent charge (finance) part, Due at signing and Total cost of the lease.

How the math works

A lease payment is two charges added together. The depreciation portion pays for the value the car is expected to lose while you drive it. The rent charge is the finance charge, the lease version of interest, on the money the leasing company has tied up.

Depreciation is the adjusted capitalized cost (what you're paying for the car after your down payment, trade equity and rebates, plus any rolled-in fee) minus the residual value, spread evenly over the term. The rent charge uses a quirk of lease math: the adjusted cap cost and the residual are added together and multiplied by the money factor. That sum is roughly twice the average balance, which is why the money factor looks so small. Tax goes on top according to your state's method.

Worked example

The MSRP is $40,000 and you negotiate the price to $37,500. You put $2,000 down, with no trade and no rebates. The residual is 57%, the money factor is 0.00250 (6.0% APR), the term is 36 months, and a $695 acquisition fee is rolled in. Your state charges 7% tax on each payment, and you're allowed the 12,000 miles a year you expect to drive.

Step	Math	Result
Residual value	40,000 × 57%	$22,800.00
Adjusted cap cost	37,500 + 695 − 2,000	$36,195.00
Depreciation per month	(36,195 − 22,800) ÷ 36	$372.08
Rent charge per month	(36,195 + 22,800) × 0.00250	$147.49
Base payment	372.08 + 147.49	$519.57
Tax	519.57 × 7%	$36.37
Monthly payment	519.57 + 36.37	$555.94
Due at signing	555.94 + 2,000	$2,555.94
Total cost of the lease	555.94 × 36 + 2,000	$22,013.87

Over three years, $13,395.00 of what you pay is depreciation, $5,309.55 is rent charge and $1,309.32 is tax. Roughly 72% of the base payment is the car losing value; 28% is borrowing cost. Drive 15,000 miles a year instead and the 9,000 extra miles at $0.25 add $2,250.00.

What moves the payment most

Residual value. Every point of residual is $400 on a $40,000 MSRP. Bumping the example from 57% to 60% drops the payment from $555.94 to $523.48, a $32.46 difference, without changing anything you negotiated. That's why the same payment can lease a pricier car from a brand that holds value.

Negotiated price. Every $1,000 off the price lowers the example payment by $32.40 and the total by $1,166.30. The price is just as negotiable on a lease as on a purchase. Settle it before anyone talks monthly payments.

Money factor. Dropping from 0.00250 to 0.00150 (6.0% to 3.6% APR) cuts the rent charge from $147.49 to $88.49 and the payment to $492.82. Ask for the money factor in writing.

Down payment. It buys a smaller payment, nothing more. With zero down, the example runs $620.74 a month and the total cost is $22,346.47, so the $2,000 saved only $332.60 over three years. If the car is totaled early, a down payment is generally not refunded, so many people keep the cash.

Common mistakes with lease quotes

• Shopping by payment alone. A payment can be shrunk by adding months, raising the down payment or trimming the mileage allowance. Compare total cost over the same term and miles.
• Underestimating your mileage. Buying extra miles up front is usually cheaper than paying at turn-in.
• Picking the wrong tax method. With tax on each payment, the example is $555.94 a month. If your state taxes the total of payments up front, the monthly drops to $519.57 but $1,309.32 is due at signing, for $3,828.89 up front. Tax on the full selling price makes that $5,144.57.
• Forgetting the fees outside the payment. Rolling the $695 acquisition fee in costs $115.58 more than paying it at signing, and the disposition fee, excess wear charges and the first payment are all separate from the monthly number.

When to use the other calculators

To decide between leasing and buying, run the same car through the Auto Loan Calculator with the same price, down payment and months, then compare the lease's total cost with the loan's total of payments minus what the car would be worth at the end. It also shows the payment if you buy the car at lease end for its residual value.

What this calculator doesn't do

Results are estimates. The leasing company's contract governs, and it may compute the rent charge, round the residual, or treat taxes and fees differently from the standard method here. It doesn't include the disposition fee, excess wear charges, registration, GAP coverage or a security deposit, and it assumes you return the car at the end.

It can't tell you the residual or money factor you'll be offered; those vary by brand, model, term and credit tier.

Frequently asked questions

Estimates for planning only. Your lender, dealer or tax authority sets the real numbers, and rates, fees and rules change. This is not financial, tax or legal advice. Nothing you type here leaves your browser. See the terms of use.