Car Lease Calculator
Calculate your monthly car lease payment from the vehicle price, residual value, money factor, and lease term.
How to use this tool
- Enter the negotiated vehicle price (cap cost) in dollars.
- Enter the residual value percentage (check with the lender or manufacturer).
- Enter the money factor from the lease quote (ask the dealer to disclose it).
- Enter the lease term in months and read off your estimated monthly payment.
Estimate your monthly car lease payment before you visit the dealership.
Formula
Residual Value = Vehicle Price × Residual % ÷ 100
Depreciation Fee = (Vehicle Price − Residual Value) ÷ Term
Finance Charge = (Vehicle Price + Residual Value) × Money Factor
Monthly Payment = Depreciation Fee + Finance Charge
How it works
This calculator uses the standard automotive lease formula to split the monthly payment into two components: a depreciation fee that amortises the vehicle's loss of value over the lease term, and a finance charge that represents the cost of borrowing based on the sum of the cap cost and residual value multiplied by the money factor.
The money factor is the leasing equivalent of an interest rate; multiply it by 2,400 to approximate the equivalent APR. The formula assumes no down payment, no acquisition fees, and no sales tax — real-world quotes will include these additional costs.
Worked example
Worked example
- Vehicle price = $30,000; residual = 55 %; money factor = 0.00125; term = 36 months.
- Residual value = $30,000 × 55 ÷ 100 = $16,500.
- Depreciation fee = ($30,000 − $16,500) ÷ 36 = $13,500 ÷ 36 = $375.00/month.
- Finance charge = ($30,000 + $16,500) × 0.00125 = $46,500 × 0.00125 = $58.125/month.
- Monthly payment = $375.00 + $58.125 = $433.125.
Monthly payment = $433.13 (depreciation $375.00 + finance charge $58.13).
Key terms
- Cap cost (capitalised cost)
- The agreed purchase price of the vehicle used as the basis for lease calculations, equivalent to the loan principal in a purchase.
- Residual value
- The projected value of the vehicle at the end of the lease term, expressed as a percentage of the original price and set by the lender.
- Money factor
- A leasing-specific rate that represents the cost of financing; multiply by 2,400 to convert to an approximate annual percentage rate (APR).
- Depreciation fee
- The monthly portion of the payment that covers the vehicle's value lost during the lease term, calculated as (cap cost minus residual) divided by the term in months.
- Finance charge
- The monthly interest-equivalent cost of the lease, based on the sum of the cap cost and residual multiplied by the money factor.
Frequently asked questions
- How is a car lease payment calculated?
- A lease payment has two parts: a depreciation fee ((cap cost − residual) ÷ term) and a finance charge ((cap cost + residual) × money factor). Add them together for the base monthly payment before taxes and fees.
- What is a money factor?
- The money factor is the lease equivalent of an interest rate. Multiply it by 2,400 to get an approximate APR. For example, 0.00125 × 2,400 = 3.0% APR.