Lease Calculator

Whether you're leasing a car, equipment, or commercial space, this calculator helps you determine the monthly payment and total cost of any lease arrangement — so you can compare leasing to buying before committing.

How to Use This Calculator

1. Enter the asset value (price of the item being leased).
2. Enter the residual value (estimated value at end of lease).
3. Enter the lease term in months.
4. Enter the money factor (for vehicle leases) or annual interest rate.
5. Enter any upfront payment (down payment / capitalized cost reduction).
6. Click Calculate to see monthly payment and total lease cost.

Lease Payment Formula

Depreciation fee = (Net Cap Cost − Residual) ÷ Months

Finance fee = (Net Cap Cost + Residual) × Money Factor

Monthly payment = Depreciation fee + Finance fee + Applicable taxes

Lease vs. Buy Comparison

• Lease: Lower monthly payment, always in warranty, flexible upgrades, but no ownership and potential mileage/usage restrictions.
• Buy: Higher payments initially, but you own the asset outright — often better long-term value for assets held 5+ years.

Equipment Lease Types

• Operating lease: Short-term, off-balance-sheet (under older accounting rules), lessor retains ownership. Equipment returned at end.
• Finance lease (capital lease): Treated as purchase for accounting; lessee holds economic ownership. Often includes buyout option.
• $1 buyout lease: Low payments during term, you buy the asset for $1 at the end. Essentially a financing arrangement.

Common Mistakes to Avoid

• Not negotiating the cap cost — The selling price is negotiable for leased vehicles and equipment. Never accept MSRP without negotiation.
• Ignoring end-of-lease costs — Excess mileage, wear and tear charges, and disposition fees can add thousands to total lease cost.
• Not comparing total lease cost to ownership cost — Add up all lease payments plus any fees; compare to loan payments plus residual value (what you'd own).

Frequently Asked Questions

Is leasing always more expensive than buying?

Not necessarily. For businesses, lease payments are fully deductible as operating expenses. For vehicles changed every 3 years, leasing avoids depreciation losses and maintenance costs of older vehicles.

Can I terminate a lease early?

Usually — but with an early termination fee, often equal to several remaining payments. Read your lease agreement carefully before signing to understand the exit terms.

What is a good money factor for a car lease?

Money factor × 2,400 = equivalent APR. A money factor of 0.00125 = 3% APR. Compare to available financing rates to see if the lease rate is competitive.

Conclusion

A lease can make financial sense for the right asset and the right situation — especially when tax deductibility, upgrade flexibility, or working capital conservation matter. Use this calculator to get the exact numbers and compare your options clearly.

Related: Auto Lease Calculator | Auto Loan Calculator | Loan Calculator | Depreciation Calculator