Auto Lease Calculator

A money factor is the lease equivalent of an interest rate, expressed as a small decimal like 0.00125 instead of a percentage. To estimate the equivalent APR, multiply the money factor by 2400 — so a money factor of 0.00125 works out to roughly a 3% APR. Dealers sometimes quote money factors to make the finance charge look smaller than it really is, so converting to APR is the easiest way to compare a lease offer against a loan or another lease.

A lease payment has two parts: a depreciation fee and a finance (rent charge) fee. The depreciation fee is the difference between the adjusted capitalized cost (negotiated price minus down payment and trade-in) and the residual value, spread evenly over the lease term. The finance fee is the sum of the adjusted cap cost and residual value multiplied by the money factor. Add the two together for the base payment, then apply your local sales tax to get the total monthly payment.

Residual value is the car's predicted worth at the end of the lease, usually expressed as a percentage of MSRP (for example, 55% for a 36-month lease). A higher residual value means the car is expected to depreciate less, which shrinks the depreciation fee and lowers your monthly payment. This is why leasing a vehicle with strong resale value, like many trucks and SUVs, often costs less per month than leasing a car that depreciates quickly.

Yes, a larger down payment or trade-in reduces the adjusted capitalized cost, which lowers both the depreciation fee and the finance fee, resulting in a smaller monthly payment. However, putting a large amount of cash down on a lease is riskier than on a purchase — if the car is stolen or totaled early in the lease, you typically cannot recover that upfront cash. Many financial advisors recommend minimizing your down payment on a lease and instead negotiating a lower price or money factor.

Leasing usually has a lower monthly payment than financing a purchase because you are only paying for the vehicle's depreciation during the lease term rather than the full price. However, at the end of a lease you own nothing and must return the car or buy it at the residual value, while a purchased car remains an asset once the loan is paid off. Leasing tends to make more financial sense if you like driving a new car every few years and stay within the mileage limits; buying tends to build more long-term wealth.

Most states tax only the monthly lease payment as you pay it, rather than the full price of the vehicle up front, which is one reason lease payments can look attractive. However, some states — including Texas, Illinois, and a handful of others — charge sales tax on the full negotiated price or the capitalized cost reduction at signing. Always check your state's specific rule, since it can meaningfully change your total lease cost.

Beyond the recurring monthly payment, most leases require a due-at-signing amount that can include the first month's payment, an acquisition fee charged by the leasing company, a security deposit, registration and title fees, and any negotiated down payment or cap cost reduction. This calculator focuses on the recurring monthly payment; be sure to ask your dealer for an itemized due-at-signing breakdown before you sign.