Car Lease Calculator
Estimate your monthly car lease payment from the MSRP, cap cost, residual value, money factor, and lease term.
What is Car Lease Calculator?
A car lease calculator breaks down your monthly payment into the two numbers dealers rarely explain clearly: depreciation (what the car loses in value during your lease) and finance charges (the "rent" you pay on both the car and its residual value).
Leasing can be a good choice if you prefer a new car every 3 years and low upfront outlay, but the math is very sensitive to cap cost, residual, and money factor — small changes to each can swing the payment by $30+ per month.
Formula
Monthly depreciation = (cap cost − residual value) ÷ months
Monthly finance charge = (cap cost + residual value) × money factor
Base monthly = depreciation + finance. Add sales tax on the payment (most states tax the monthly payment, not the full vehicle value).
Money factor × 2,400 ≈ equivalent APR.
Worked example
MSRP $35,000, cap cost $33,000, $2,000 down, 58% residual, MF 0.0018, 36 months, 6.5% tax:
- Adjusted cap = $33,000 − $2,000 = $31,000
- Residual = $35,000 × 0.58 = $20,300
- Depreciation = ($31,000 − $20,300) / 36 ≈ $297.22
- Finance = ($31,000 + $20,300) × 0.0018 ≈ $92.34
- Base = $389.56; with 6.5% tax ≈ $414.88/month
- Equivalent APR = 0.0018 × 2400 ≈ 4.32%
How to use this calculator
- Start with MSRP (the window-sticker price).
- Enter the negotiated price — this becomes the cap cost. Dealers often quote monthly payment; ask for the cap cost directly.
- Enter your down payment (called a "cap cost reduction" in lease jargon). Putting less down is usually better — you lose it if the car is totaled early.
- Enter the residual percentage the bank assigns. Higher residual = lower payment. Brands like Toyota and Honda typically have strong residuals.
- Enter the money factor. Multiply by 2,400 to convert to APR for comparison.
Frequently asked questions
What is a money factor?
The lease equivalent of an interest rate. To convert to APR, multiply by 2,400 (not 100). So a money factor of 0.0018 ≈ 4.32% APR.
Why put zero or minimal down on a lease?
If your car is totaled or stolen in the first few months, your insurance pays off the lease — but you lose any cap-cost reduction you made. Putting less down also preserves cash. Some dealers advertise "$0 down" leases with artificially higher monthly payments; compare total cost.
Should I lease or buy?
Lease if you want a new car every 3 years, dislike dealing with resale, and drive under the mileage limits (usually 10–15k/year). Buy if you plan to keep the car 6+ years — you stop making payments after the loan ends, and total cost over the car's life is almost always lower than leasing.
What are mileage penalties?
Typical leases charge $0.20–$0.30 per mile for every mile over the contracted limit. If you drive more than 15,000 miles per year regularly, leasing is probably the wrong choice — or pre-pay for extra miles upfront, which is cheaper than the per-mile penalty.