Auto Lease Calculator
Estimate your monthly car lease payment and total cost of ownership.
Auto Lease Calculator
Car leases have a reputation for being confusing — money factors, residual values, cap cost reductions. This calculator simplifies it all and shows your exact monthly lease payment plus the true total cost so you can compare leasing vs. buying.
What Is an Auto Lease?
A lease is essentially renting a car for a fixed period (typically 24–36 months). You pay for the portion of the car's value you use, not the full price. At the end, you return the car or buy it at the pre-set residual value.
How to Use This Calculator
- Enter the vehicle's MSRP (sticker price).
- Enter the negotiated selling price (cap cost).
- Enter the down payment / cap cost reduction.
- Enter the residual value (% of MSRP the car is worth at lease end — usually 50%–60%).
- Enter the money factor (lease interest rate; multiply by 2,400 to convert to APR).
- Enter the lease term in months and annual mileage allowance.
Lease Payment Formula
Depreciation Fee = (Adjusted Cap Cost − Residual Value) ÷ Months
Finance Fee = (Adjusted Cap Cost + Residual Value) × Money Factor
Monthly Payment = Depreciation Fee + Finance Fee + Tax
Example Calculation
MSRP: $45,000 | Cap cost: $42,000 | Down: $2,000 | Residual: 55% ($24,750) | Money factor: 0.00125 | 36 months | 8% tax
- Adjusted cap cost: $40,000
- Depreciation: ($40,000 − $24,750) ÷ 36 = $423.61
- Finance fee: ($40,000 + $24,750) × 0.00125 = $80.94
- Pre-tax payment: $504.55 | With 8% tax: ≈ $545/month
Leasing vs. Buying
- Leasing: Lower monthly payment, always in warranty, easy to upgrade every 3 years. But you build no equity and face mileage penalties.
- Buying: Higher payments initially, but you own the car outright. Better long-term value if you keep the car 7+ years.
Common Mistakes to Avoid
- Putting a large down payment on a lease — If the car is totaled, you lose that money. Keep down payments low on leases.
- Ignoring mileage limits — Overage fees of $0.15–$0.30/mile add up fast. Be realistic about annual driving.
- Not negotiating the cap cost — The selling price is negotiable on a lease, just like a purchase. Always negotiate down from MSRP.
- Forgetting acquisition and disposition fees — These can add $1,500–$2,000 to total lease cost.
Frequently Asked Questions
What is a money factor?
The money factor is the lease equivalent of an interest rate. To convert: multiply money factor × 2,400. A money factor of 0.00125 = 3% APR.
What is residual value?
The pre-set value the car is expected to be worth at lease end. High residual = lower monthly payments. You can buy the car for this price at lease end.
Can I negotiate a lease?
Yes — negotiate the selling price (cap cost), and sometimes the money factor. Residual value is typically set by the manufacturer and non-negotiable.
What happens if I go over mileage?
You pay a per-mile fee at lease end, usually $0.15–$0.30/mile. On a 10,000-mile overage at $0.25/mile, that's $2,500.
Is leasing ever a good financial choice?
Yes — if you value always having a new car, want the lowest monthly payment, primarily use a car for business (lease payments are deductible), or don't want to deal with selling a used car.
Conclusion
Leasing isn't better or worse than buying — it depends entirely on how you use a car and your financial priorities. Calculate your exact lease payment here, then compare it to a purchase using our Auto Loan Calculator.
Related: Auto Loan Calculator | Loan Calculator | Depreciation Calculator | Lease Calculator
Negotiation Tip
Don't just negotiate the monthly payment. Negotiate the "Capitalized Cost" (the purchase price) just as if you were buying the car. This will directly lower your monthly lease payment.
