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Lease Calculator

Break down a lease payment using cap cost, residual value, money factor, sales tax, and term. Spot dealer markups in the money factor and negotiate from a position of strength.

What this calculator is for

A car lease calculator breaks the monthly payment into depreciation and finance charge using cap cost, residual value, money factor, term, and sales tax. Leases are not “renting for cheap” — they are structured financing on the portion of the vehicle you use during the term.

Use it to spot a marked-up money factor, compare subvented factory leases to bank loans, and see how a higher residual lowers payment (but affects buyout later). Shoppers negotiating SUVs and EVs with heavy incentives rely on this math at the kitchen table before visiting the store.

A good outcome: base payment, tax-inclusive payment, and APR equivalent (money factor × 2,400). Compare total lease cost to buying with the buy vs lease calculator.

Calculator

How to use this calculator

  1. Cap cost is selling price minus incentives/cap reduction.
  2. Residual is the buyout value at lease end (from lender).
  3. Money factor × 2,400 ≈ APR equivalent — compare to loan rates.

Cap cost is selling price minus rebates and cap-cost reduction (down payment on a lease).

Residual is the lender’s predicted value at lease end — set by the bank, negotiable only indirectly via program.

Money factor × 2,400 ≈ APR equivalent — compare to your credit union auto loan rate.

Mileage overage, wear charges, acquisition/disposition fees, and gap insurance are not in the base formula — budget separately.

The math: do it without a calculator

Depreciation/mo = (Cap cost − Residual) ÷ Term

Finance charge/mo = (Cap cost + Residual) × Money factor

Base payment = Depreciation + Finance

With tax: Payment ≈ Base × (1 + tax rate). APR equivalent ≈ Money factor × 2,400.

Depreciation/month = (Cap cost − Residual) ÷ Term. Finance charge/month = (Cap cost + Residual) × Money factor. Base = depreciation + finance.

With tax: payment ≈ base × (1 + tax rate) when tax is on payment monthly (rules vary by state).

Example: cap $38,000, residual $24,000, 36 months, MF 0.00125 → depreciation $389/mo plus finance charge before tax.

Real-world examples

Money factor vs. APR

A lease money factor of 0.00125 multiplies by 2,400 to roughly 3.0% APR equivalent — a standard dealer worksheet conversion. Compare that to bank loan APR before you sign.

Cap cost and residual structure

If negotiated cap cost is $38,000, residual $24,000 after 36 months, depreciation is spread over the term plus finance charge on cap plus residual. Lease calculators help spot a marked-up money factor or low residual subsidy.

Troubleshooting & fine-tuning your setup

Lease Payment Still Off After Using the Calculator

Captive leases often add acquisition fees, disposition fees, and marked-up money factors not in your first draft. Tax may be paid monthly in some states and upfront in others — payment tax treatment changes the number.

Residual is set by the bank, not negotiable like price sometimes is. A higher residual lowers payment but raises buyout later. Compare money factor × 2,400 to loan APR on a similar term.

Frequently asked questions

Car Lease Payment FAQs

What is a good money factor on a lease?

Multiply money factor by 2,400 for an APR equivalent. Subvented leases on new cars often land well below market loan APR; marked-up factors are a common dealer profit center.

Does putting money down on a lease save interest?

Down payment (cap reduction) lowers the payment but does not work like loan principal the same way if the car is totaled — gap coverage matters. Many advisors cap drive-off.

Why is my lease payment higher with the same selling price?

Lower residual, higher money factor, shorter term, or tax/fees capitalized into the lease all raise payment. Check each line on the contract.

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