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Auto Lease Calculator FullScreen

This free calculator allows you to determine your monthly auto lease payments and provides you with an effective method to estimate what your total lease payments will be as well as your net capitalized costs, lease fees, depreciation and residual asset value.

Car Lease Payment Calculator

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Leasing a Car

When you sign a contract to lease a car, you are entering into a legally binding agreement that gives you the right to use that vehicle for a set amount of time and given certain terms and conditions. As the holder of the lease, you are required to make a down payment followed by set monthly payments. It is also your responsibility to take care of the car up until the end of the lease. When the lease ends, you return the vehicle to the granter of the lease.

Calculating your monthly payments


A drop in a vehicle's value over time cannot be avoided. This is why depreciation is taken into account when a lessor is establishing a lease contract. To illustrate, assume that vehicle A is worth $30,000 new off the lot, but in three years' time its value has dropped to around $20,000. This represents a depreciation value of $10,000, which will be considered when the monthly lease payments for vehicle A are determined.

It is important to remember that mileage has a significant impact on depreciation value, with cars that are used more being worth less.

The following formula is used to calculate the depreciation value of a vehicle:
(capitalized cost - residual value) / term of the lease = depreciation value

Capitalized cost:

A vehicle's capitalized cost is the total amount financed by the lease. This includes the final vehicle price (typically the MSRP is negotiated down) as well as any credit from a trade-in, rebates and down payment reductions.

Residual value:

A vehicle's residual value is how much it will be worth when the lease comes to an end. Standard practice is for the lessor to provide you with the residual value or a residual percentage to apply against the vehicle's MSRP.

Term of the lease:

Typically, the duration of a lease is from three to five years.


Monthly lease payments can be severely impacted by interest rates, so it is vital to consider interest rates before signing a lease agreement. High interest rates equate to high monthly repayments.

The "money factor" is sometimes used by car dealerships to calculate the monthly interest owed. When determining your monthly lease payment, it is important to consider the impact of interest and add it to the vehicle's depreciation value.

The formula used by dealerships to calculate the interest owed each month is as follows:
(capitalized cost + residual cost) × money factor = interest owed monthly

There are two ways to calculate the money factor. Firstly, the interest rate can be used. Dividing the interest rate by 2,400 will give you the money factor. Secondly, the lease charge can be used, in which case the following formula is applied:
lease charge / [(capitalized cost + residual value) × term of lease] = money factor


Remember to take taxes into account when you're thinking about leasing. Although taxes are often forgotten, by factoring them in, you will know your full monthly expenses when leasing a vehicle.

Taxes are payable on the depreciation and interest costs. Importantly, states have differing sales taxes so ensure you are aware of the tax situation where you are leasing (find the sales tax rate that applies in your state HERE).

To calculate your taxes, apply the formula below:
(depreciation cost + interest) × sales tax = monthly tax amount

Total monthly payments

Once you have figured out the values mentioned above (i.e. depreciation value, interest owed and taxes owed), you will be able to determine what your car lease agreement will really cost you every month. Simply add all the figures together:
depreciation value + interest owed + tax owed = total monthly payments

By taking the time to find the information you need, you can accurately calculate your monthly car lease payments and ensure that you get a deal that won't leave a hole in your wallet.

What is Auto Lease Calculator

An Auto Lease Calculator is a financial tool used to estimate the monthly lease payment and total cost associated with leasing a vehicle. It helps individuals assess the affordability of leasing, compare different lease options, and make informed decisions about leasing a car.

Here's how a typical Auto Lease Calculator works:

  1. Vehicle Details: You input the specific details about the vehicle you plan to lease, including the purchase price or capitalized cost, residual value, and any additional fees or taxes.

  2. Lease Term: You specify the duration or time period for which you will lease the vehicle. Common lease terms are typically 24, 36, or 48 months.

  3. Money Factor: The calculator allows you to input the money factor, which is the equivalent interest rate used in auto leasing. It determines the financing cost associated with the lease.

  4. Down Payment: You have the option to input an initial down payment or capitalized cost reduction to lower the monthly lease payments. This amount is subtracted from the capitalized cost.

  5. Calculation: Using the provided inputs, the Auto Lease Calculator calculates the estimated monthly lease payment based on the leasing formula. It takes into account the vehicle details, lease term, money factor, and down payment (if applicable) to determine the monthly payment amount.

  6. Displaying the Result: The calculator presents the calculated monthly lease payment, along with the total cost of leasing over the lease term. It may also display a breakdown of the payment components, including depreciation, rent charge, taxes, and additional fees.

The Auto Lease Calculator allows individuals to evaluate the cost of leasing a vehicle and assess its affordability compared to other financing options. It helps borrowers understand the financial commitment associated with the lease, including the monthly payment amount and overall lease cost.

It's important to note that the calculated results are estimates based on the provided inputs and assumptions. Actual lease terms, money factors, fees, taxes, and specific terms may vary depending on factors such as the leasing company, creditworthiness, and current market conditions. Therefore, it's advisable to consult with a qualified financial advisor or leasing provider for accurate and personalized information regarding auto lease calculations and available options.

Auto Lease Calculator Example

Certainly! Here's an example of an Auto Lease Calculator that helps you determine the monthly lease payment and total lease cost based on the vehicle's price, residual value, lease term, money factor, and any additional fees:

Let's assume we have the following auto lease details: Vehicle Price: $30,000 Residual Value: 60% (percentage of the vehicle's value at the end of the lease) Lease Term: 3 years (36 months) Money Factor: 0.0025

Step 1: Calculate the Depreciation Cost Depreciation Cost = (Vehicle Price - Residual Value) / Lease Term

Depreciation Cost = ($30,000 - ($30,000 * 0.60)) / 36 Depreciation Cost = $450 (rounded to two decimal places)

Step 2: Calculate the Finance Cost Finance Cost = (Vehicle Price + Residual Value) * Money Factor

Finance Cost = ($30,000 + ($30,000 * 0.60)) * 0.0025 Finance Cost = $90 (rounded to two decimal places)

Step 3: Calculate the Monthly Lease Payment Monthly Lease Payment = Depreciation Cost + Finance Cost

Monthly Lease Payment = $450 + $90 Monthly Lease Payment = $540

Therefore, the monthly lease payment for a vehicle with a price of $30,000, a residual value of 60%, a lease term of 3 years, and a money factor of 0.0025 would be approximately $540.

Step 4: Calculate the Total Lease Cost Total Lease Cost = Monthly Lease Payment * Lease Term

Total Lease Cost = $540 * 36 Total Lease Cost = $19,440

Therefore, the total lease cost for the vehicle over the 3-year lease term would be approximately $19,440.

Please note that this calculation assumes a simple lease structure without considering any taxes, registration fees, or other charges that may be associated with the lease agreement. Additionally, the values used in this example are for illustrative purposes and may not reflect actual vehicle prices, residual values, lease terms, money factors, or additional fees.