Car Lease Calculator
Estimate your monthly car lease payment. Enter the capitalized cost, residual value, money factor, and term, and this calculator splits the payment into its depreciation and finance (rent) components.
Formula
Monthly Lease = (Cap Cost − Residual) ÷ Term + (Cap Cost + Residual) × Money Factor
- A lease payment has two parts: depreciation (the value used up) and a finance charge (the rent on the money).
- Depreciation component = (capitalized cost − residual value) ÷ lease term in months.
- Finance component = (capitalized cost + residual value) × money factor.
- The money factor is a lease interest rate in disguise — multiply it by 2,400 to approximate the APR.
- A higher residual value lowers depreciation, reducing the monthly payment.
- This excludes taxes, fees, and any down payment (cap cost reduction).
$35,000 cap cost, $21,000 residual, 0.0025 MF, 36 mo
Inputs
- Capitalized Cost: 35000
- Residual Value: 21000
- Money Factor: 0.0025
- Lease Term (months): 36
Depreciation = ($35,000 − $21,000) ÷ 36 ≈ $388.89. Finance = ($35,000 + $21,000) × 0.0025 = $140. Monthly lease ≈ $528.89.
Frequently asked questions
What is the money factor?
It's the lease equivalent of an interest rate, expressed as a small decimal. Multiply it by 2,400 to get the approximate APR (e.g. 0.0025 × 2400 = 6%).
What is residual value?
The car's predicted worth at the end of the lease. A higher residual means less depreciation to pay for, which lowers your monthly payment.
Why are there two components?
You pay for the value the car loses (depreciation) plus a finance charge for borrowing the car's value over the term. Together they make the base monthly payment.
Does this include tax and fees?
No. It's the base payment only. Sales tax, acquisition and disposition fees, and any down payment are added or handled separately.