Auto Lease Calculator

How a car lease payment is calculated

A lease payment has two parts. The first is depreciation: the vehicle’s agreed price minus its residual value (what it is expected to be worth at lease end), spread evenly across the months of the lease. You are essentially paying for the value the car loses while you drive it. The second part is the finance charge, sometimes called rent, which is interest on both the amount financed and the residual value. Add the two together, apply sales tax, and you have your monthly payment.

Leases quote interest as a money factor rather than an APR. The two are interchangeable: money factor times 2,400 equals the approximate APR, so a money factor of 0.0025 is about 6%. This calculator lets you enter a familiar APR and converts it for you. A higher residual value lowers your payment because the car loses less value on paper, which is why some models lease far more cheaply than others even at the same price.

The levers you actually control are the negotiated price and the cap-cost reduction (your down payment and trade-in), both of which lower the amount you finance. Note that a cash down payment on a lease is money you do not get back, and if the car is totaled early you can lose it — many advisers prefer a low or zero down payment on a lease. This tool estimates the core payment; a real lease also adds an acquisition fee, registration, and any dealer fees, and sales-tax rules vary by state. Treat the result as a planning estimate.