Car Lease Calculator
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Vehicle & lease terms
Enter an MSRP and a negotiated price above zero to estimate the lease.
Enter an MSRP and a negotiated price above zero to estimate the lease.
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Enter an MSRP and a negotiated price above zero to estimate the lease.
Know what this estimate is based on
- Jurisdiction
- General model; U.S.-specific rules are identified on the relevant tool
- Scope and limitations
- Educational estimate only. A lender may use different compounding, day-count, eligibility, tax, insurance, escrow, fee, or rounding rules.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter the MSRP, the negotiated price you have agreed, the residual value percentage from the quote, the money factor and the term in months.
- 02
Open Advanced options to add a cap-cost reduction (cash down or trade-in), the acquisition, disposition and registration fees, the sales-tax rate, and your annual and expected mileage.
- 03
Read the monthly payment split into depreciation, rent and tax, the due-at-signing and total lease cost, the cost per mile, the lease-vs-buy verdict, and the residual and mileage tables.
Formula
A lease payment is two charges plus tax, not an amortized loan. First, the residual value is a percentage of the MSRP — not the price you negotiate — so residual = MSRP × residual % = 38,000 × 57% = 21,660. The capitalized cost starts from the negotiated price plus the acquisition fee and is lowered by any cap-cost reduction: adjusted cap = (35,000 + 695) − 2,000 = 33,695. The depreciation portion spreads the value you use up across the term: (33,695 − 21,660) ÷ 36 = 334.31 a month, and it is usually the larger slice. The rent, or finance, charge applies the money factor to the cap cost plus the residual: (33,695 + 21,660) × 0.0020 = 110.71 a month. Their sum is the base payment, 445.02, and sales tax is charged on that payment rather than on the whole car: 445.02 × 7% = 31.15, for an all-in monthly of 476.17. The money factor converts to a familiar rate by multiplying by 2,400: 0.0020 × 2,400 = 4.8% APR equivalent. Over the 36 months you pay 17,142, and with 2,000 down, 400 registration and a 350 disposition fee the total lease cost is 19,892 — and you own nothing at the end, because the car goes back at its 21,660 residual.
Example
Start from the defaults: a 38,000 MSRP, a 35,000 negotiated price, a 57% residual, a 0.0020 money factor, a 36-month term and 2,000 down. The residual the leasing company expects is 38,000 × 57% = 21,660 — and because it is set on the sticker price, negotiating the price down to 35,000 does not lower it. The capitalized cost is 35,000 + 695 acquisition − 2,000 down = 33,695. Depreciation is (33,695 − 21,660) ÷ 36 = 334.31 a month, the biggest slice. The rent charge is (33,695 + 21,660) × 0.0020 = 110.71 a month. Adding them gives a 445.02 base, and 7% sales tax on the payment adds 31.15, for 476.17 a month. The money factor is a 4.8% APR equivalent. You need 2,876.17 due at signing — the 2,000 down, 400 registration and the first 476.17 payment — then pay 17,142 across the term and 19,892 all in once the 350 disposition fee is counted. Each of the 36,000 miles the contract allows costs about 0.55. The residual table shows how powerful that one percentage is: drop the residual to 47% and the payment climbs to 580.98; raise it to 67% and it falls to 371.35. Financing the same car to own it would run about 1,059.29 a month — 583 more than the lease — but after counting the 21,660 resale value the buyer keeps, buying works out about 1,018 cheaper across the three years. And a no-down version of this lease would cost 539.89 a month, so the 2,000 down buys a 63.72 monthly saving: cash that builds no equity and is gone if the car is stolen or totaled.
Definitions
- MSRP
- The sticker price. The residual value is a percentage of this, so MSRP — not the negotiated price — sets how much value the car keeps at lease end (0 to 300,000).
- Negotiated price
- The selling price you agree before fees, also called the cap cost. Lowering it cuts depreciation but not the residual, which rides on MSRP (0 to 300,000).
- Residual value
- The share of MSRP the leasing company predicts the car will be worth at lease end; a higher residual means less depreciation to finance and a lower payment (10% to 85%).
- Money factor
- The lease equivalent of an interest rate, charged on the cap cost plus the residual; multiply it by 2,400 to read it as an APR (0 to 0.01).
- Lease term
- The number of months you keep the car, over which the depreciation is spread; a longer term lowers the monthly depreciation but adds rent charges (12 to 60 months).
- Cap-cost reduction (down)
- Cash put down at signing to lower the capitalized cost and the payment. On a lease it buys no equity and is not refunded if the car is totaled (0 to 50,000).
- Trade-in value
- Equity from a trade applied as a cap-cost reduction, lowering the financed amount the same way cash down does (0 to 100,000).
- Acquisition fee
- A bank fee to originate the lease, capitalized into the cost so it is spread across the payments rather than paid separately (0 to 2,000).
- Disposition fee
- A fee charged when you return the car at lease end; it is part of the total lease cost but not the monthly payment (0 to 1,500).
- Sales tax
- In most regions, tax is charged on each monthly lease payment rather than the whole car — a key difference from buying, where the full price is taxed up front (0% to 15%).
- Money-factor APR
- The money factor expressed as an annual rate (money factor × 2,400). Always convert before comparing a lease against an auto loan.
- Excess mileage charge
- A per-mile penalty for driving past the contract allowance, settled at lease end; pre-buying miles is almost always cheaper than the after-the-fact rate.
Good to know
Leasing rents the car's fastest-depreciating years
A lease is fundamentally a long-term rental, and that single fact reorganizes everything the calculator shows. When you finance a purchase, every payment chips away at a balance until the car is yours; when you lease, you pay only for the slice of the car's life you consume between signing and handing the keys back. That slice is the depreciation: the difference between what the car is worth now and what the leasing company predicts it will be worth at the end. The defaults make this concrete. A 38,000 car with a 57% residual is expected to be worth 21,660 at the end of three years, so the value you actually use up is what the lease finances, not the full price. This is why a lease payment of 476 a month can sit well below the loan payment on the same car, and also why, after paying 19,892 across the term, you walk away owning nothing — the car returns at its 21,660 residual and the cycle starts again with a new vehicle. Understanding this framing prevents the most common misreading of a lease, which is to treat the low payment as a bargain. It is not cheaper in the sense of building toward an asset; it is cheaper because you are renting a depreciating object for the years it loses value fastest and then giving it back. Whether that is a good deal depends entirely on what you value: the use of a newer car with a predictable payment, or the eventual ownership and resale value that financing delivers. The tool exists to make the rental nature visible, separating the payment into the part that covers lost value, the part that is pure rent for the borrowed money, and the tax charged on top.
The payment is depreciation plus rent, then taxed
The monthly figure the calculator produces is the sum of two charges and a tax, and seeing them apart is the key to reading any lease quote. The first is the depreciation portion. It takes the adjusted capitalized cost, subtracts the residual, and spreads the result evenly across every month of the term. With the defaults that is 33,695 minus 21,660, divided by 36 months, giving 334.31 a month. This part is not interest at all; it is the straight-line cost of the value you use up, and it is usually the larger of the two slices. The second is the rent, or finance, charge. It compensates the leasing company for tying up its money in a car you are driving, and it is found by multiplying the money factor by the sum of the cap cost and the residual: 0.0020 times 55,355, which comes to 110.71 a month. Notice the residual appears in both calculations but pulls in opposite directions: a higher residual shrinks the depreciation portion because there is less value to finance, yet slightly raises the rent charge, which is levied on the cap cost plus residual. The depreciation effect dominates, so a higher residual lowers the overall payment. Adding the two gives a 445.02 base, and then sales tax lands on that payment — 7% here, or 31.15 — for an all-in 476.17. Keeping the slices separate is practically useful when you compare quotes, because two dealers can reach the same monthly through very different combinations: one with a low money factor and a weak residual, another with the reverse. The split tells you whether you are paying mostly for depreciation, which is largely fixed by the car, or for the rent charge, which is where shopping the money factor can actually move the number.
The money factor and the 2,400 rule
Leasing has its own way of quoting the cost of money, and it trips up almost everyone the first time. Instead of an annual percentage rate, a lease uses a money factor, a small decimal such as the 0.0020 default that looks nothing like a rate you would recognize. The relationship is fixed and simple: multiply the money factor by 2,400 to get the equivalent APR. The default 0.0020 becomes 0.0020 times 2,400, or 4.8%, exactly the APR-equivalent the calculator reports. The conversion runs both ways, so if a lender quotes a 6% lease rate, their money factor should be 6 divided by 2,400, or 0.0025. Knowing this multiplier matters for two reasons. First, a money factor is deliberately unfamiliar, and a dealer can quote one that sounds tiny while it actually represents a steep rate; converting it strips away the disguise. The calculator flags a money factor above roughly 0.005, around a 12% APR, as high for a lease. Second, you cannot compare a lease to a purchase loan without putting them in the same units, and the 2,400 conversion lets you set a 4.8% lease rent charge beside a 5% auto-loan rate on equal footing. The 2,400 figure itself comes from the structure of the rent charge: it bundles the division by twelve months with a factor of two that arises because the charge is applied to the average of the starting and ending balances rather than a declining balance. You do not need to derive it to use it. What you do need is the discipline to convert every money factor to an APR before judging whether a lease is competitively priced, because the rent charge is the one part of the payment a sharp negotiator can sometimes lower.
Residual value is the biggest lever — and it rides on MSRP
If you could change only one number on a lease, the residual value would give you the most leverage over the payment, and the calculator's residual table is built to show exactly that. The residual is the leasing company's forecast of what the car will be worth when you return it, expressed as a percentage of the MSRP rather than the price you negotiate. That distinction matters enormously. Because the residual rides on the sticker price, knocking the negotiated price down from 38,000 to 35,000 lowers the depreciation you finance while leaving the 21,660 residual untouched, so every bit of discount flows straight into a lower payment. The residual then does double duty: it caps how much depreciation you finance and it feeds the rent charge. Because the depreciation portion is the cap cost minus the residual spread over the term, a higher residual means less value to pay for and a markedly lower payment. The table makes the sensitivity vivid. Holding the cap cost, the 36-month term and the 0.0020 money factor constant, a 47% residual produces a 580.98 payment, the default 57% gives 476.17, and a 67% residual drops it to 371.35 — a swing of more than 200 a month driven by nothing but the resale forecast. This is why some cars lease far more cheaply than others at the same sticker price: models with a strong reputation for holding value earn high residuals, so you finance less depreciation, while cars that depreciate hard carry low residuals and punishing payments. It also explains a counterintuitive truth: you generally want to lease the car that depreciates least, the opposite of the buy-used wisdom that favors cars whose depreciation someone else has already absorbed. You do not negotiate the residual, but you can use it as a screen — compare residual percentages across candidate cars and let a high one steer you toward the most car for the lowest monthly outlay.
Due at signing, total lease cost and cost per mile
The monthly payment is only part of what a lease costs, and the calculator pulls the rest into the open. Due at signing is the cash you need on day one: the cap-cost reduction, the registration and doc fees, and the first month's payment — 2,000 plus 400 plus 476.17, or 2,876.17 with the defaults. The acquisition fee does not appear here because it is capitalized, folded into the cost and spread across the payments rather than paid separately. Total lease cost is the all-in figure that matters most for comparison: every monthly payment, plus the cash down and trade, plus registration, plus the disposition fee you pay to hand the car back. Here that is 17,142 of payments plus 2,000 plus 400 plus 350, or 19,892 — and the sobering part is that you own nothing afterward, because the car leaves at its residual. Cost per mile reframes the same total against how much you actually drive: 19,892 over the 36,000 miles the contract allows is about 0.55 a mile, a useful yardstick for judging whether a lease earns its keep against your real mileage. These figures expose costs that a headline monthly payment hides. A quote can advertise an attractive payment while loading the due-at-signing with fees and a large cap-cost reduction, or while carrying a stingy mileage allowance that drives the cost per mile up. Reading the payment, the due-at-signing, the total cost and the cost per mile together is the only way to compare two leases honestly, because a lower monthly on one can easily be more expensive once the cash up front and the miles you give up are counted.
Mileage allowances and the charges that follow
The residual the calculator uses assumes the car comes back in a particular condition, and the two things that most often blow up a lease at return time are mileage and wear. Every lease sets an annual mileage allowance, commonly between ten and fifteen thousand miles a year, and the residual is priced on the assumption you stay within it. Drive more, and you owe an excess-mileage charge for every mile over the limit, billed at a per-mile rate written into the contract. The calculator projects it for you: at the default 12,000-mile allowance you are entitled to 36,000 miles over three years, but if you expect to drive 15,000 a year you will run 9,000 miles over, and at 0.25 a mile that is about 2,250 owed at lease end. The mileage table extends this across several allowances so you can see how the cost per mile and the projected penalty move together. Those charges are modest individually but add up fast, and because they settle at the end they often arrive as an unwelcome surprise on top of the final payment. The logic is simple: extra miles make the car worth less than the residual assumed, so you cover the gap. The defense is to estimate your real annual driving honestly before signing and buy a higher allowance up front if you need it, since pre-purchased miles are almost always cheaper than the after-the-fact rate. Wear and tear works the same way. A lease return is inspected against a normal-wear standard, and damage beyond it — dents, deep scratches, torn upholstery, bald tires — is charged back because it reduces the car's value below the residual. None of these charges appear in the monthly payment, which is precisely why they catch people out: the payment covers planned depreciation and rent, while mileage and wear cover the unplanned depreciation you cause.
Why a cap-cost reduction is risky money
The cap-cost reduction field models a lease down payment, and it behaves very differently from a down payment on a purchase. On a lease, money down reduces the capitalized cost; the calculator subtracts it from the gross cap cost to get the adjusted figure, which lowers both the depreciation portion and the rent charge. The zero-down comparison isolates the effect: with nothing down this lease would cost 539.89 a month, so the 2,000 cap-cost reduction buys a saving of about 63.72 a month. So far it looks like any down payment — more up front, less per month. The danger is what the money buys, which is nothing you own. On a purchase, a down payment becomes equity you can recover by selling the car. On a lease, a cap-cost reduction simply pre-pays part of the rental, and you have no claim on it. If the car is stolen or written off early in the term, the insurance settlement pays the leasing company the car's value, gap coverage handles the difference between that value and the lease balance, but neither returns your cap-cost reduction. It evaporates. That asymmetry is why experienced lessees keep cash down as low as the deal allows and accept a slightly higher monthly in exchange; the higher payment is the price of keeping your money liquid and protected. The calculator warns when the cap-cost reduction climbs past about a tenth of the price, the point at which the exposed cash becomes material. If a dealer pushes a large down payment to advertise a headline monthly, recognize the trade for what it is: you are converting recoverable cash into unrecoverable pre-paid rent to make one number look smaller. Use the field to see the payment effect, then decide whether the risk of losing that cash is worth the monthly saving it buys.
Lease vs buy, and the edge costs: gap and early termination
The deepest question the calculator helps with is whether to lease at all, and the lease-vs-buy panel answers it on equal terms. It finances the same car to own it over the same months at the money factor's APR-equivalent, and it accounts for the one structural difference that decides most of these comparisons: a lease taxes only the payment, while buying taxes the whole price up front. With the defaults the lease runs 476 a month against 1,059 to finance the purchase — leasing wins the monthly by 583. But buying ends with an asset. The buyer owns a car worth roughly its 21,660 residual, and once that resale value is netted out, buying costs about 1,018 less over the three years. That is the real trade: leasing buys a lower payment and a newer car more often, buying builds equity. Which fits depends on how you use cars. Leasing suits drivers who want a fresh vehicle every few years, prize a predictable payment, stay within a known mileage allowance, and do not care about ownership. Buying suits drivers who keep cars for many years, drive long distances, or want a paid-off car that eventually runs payment-free. Beyond that core trade sit costs that never appear in the headline payment but can decide whether a lease was wise. Gap coverage is essential on a lease, because a stolen or totaled car leaves you owing the lease balance while insurance pays only the depreciated value; gap insurance covers that difference. Early termination is the other trap — breaking a lease before the term ends is expensive, often the remaining payments plus stiff fees, because the deal was priced on the full term. The calculator estimates that exposure, around 11,778 if you exit a third of the way through this lease, precisely so you commit only to a term you are confident you can finish.
Frequently asked questions
Why does the payment split into a depreciation part and a rent part?
A lease only charges you for the value you use during the term, not the whole car. The depreciation portion is the gap between the adjusted cap cost and the residual spread over the months — here (33,695 − 21,660) ÷ 36, or 334.31. The rent charge is the leasing company's return for fronting the money, the money factor on the cap cost plus residual, or 110.71. Together with 31.15 of sales tax they make the 476.17 payment.
How do I turn the money factor into an interest rate?
Multiply the money factor by 2,400. The 0.0020 default becomes 0.0020 × 2,400 = 4.8%, the APR-equivalent the calculator shows. The conversion runs both ways, so a 6% rate would be a 0.0025 money factor. Always convert before comparing a lease against an auto loan, because a low-looking money factor can hide a high rate.
Why is the residual based on MSRP and not the price I negotiate?
Leasing companies set the residual as a percentage of the sticker price because it reflects the model's expected resale value, which a discount on your particular deal does not change. That is good for you: negotiating the price down to 35,000 lowers the depreciation you finance while the 21,660 residual stays put, so every bit you knock off the price flows straight into a lower payment.
Should I make a down payment on a lease?
A cap-cost reduction lowers the payment — 2,000 down trims this lease by about 63.72 a month — but unlike a purchase down payment it buys no equity. If the car is stolen or totaled early, gap coverage settles the lease balance but your cap-cost reduction is gone. Most lessees keep cash down low and accept a slightly higher monthly so a loss does not also cost them their up-front money.
How are the mileage charges calculated?
The residual assumes you stay within the contract allowance — 12,000 miles a year here, or 36,000 over the term. Drive past it and you owe the per-mile excess rate at return: expecting 15,000 a year projects 9,000 excess miles at 0.25, about 2,250. Because extra miles make the car worth less than the residual assumed, pre-buying miles up front is almost always cheaper than the penalty.
Is leasing cheaper than buying?
On the monthly payment, usually — leasing this car costs 583 a month less than financing it to own. But over the term, buying often wins once you count the car's resale value: here the buyer ends with a 21,660 car, making buying about 1,018 cheaper over three years. Leasing buys a lower payment and a newer car more often; buying builds an asset. The lease-vs-buy table makes the trade explicit.
What happens if I end the lease early?
Early termination is expensive because the deal was priced on the full term. Walking away around a third of the way in can leave you owing most of the remaining payments plus the disposition fee — roughly 11,778 on this lease — with no asset to show for it. The calculator surfaces that exposure as a warning. Only commit to a term you are confident you can finish.