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Car Lease Calculator

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Calculate your monthly car lease payment based on vehicle price, residual value, and interest rate. Understand depreciation vs finance fees before you sign.

🇺🇸This tool is specific to United States
$5,000$150,000
$0$50,000
$0$50,000
2080
025
015

Monthly Payment

$513
Total Lease Payments
$18,453
Depreciation Fee/Month
$382
Finance Fee/Month
$131
Residual Value
$19,250

This calculator computes your Monthly Payment, Total Lease Payments, Depreciation Fee/Month, Finance Fee/Month, Residual Value from the values you enter.

Inputs
Vehicle PriceDown PaymentTrade-in ValueResidual ValueInterest Rate (APR)Lease TermSales Tax Rate
Outputs
Monthly PaymentTotal Lease PaymentsDepreciation Fee/MonthFinance Fee/MonthResidual Value

What is a Car Lease?

A car lease calculator estimates your monthly lease payment before you walk into a dealership. Enter the vehicle price, down payment, trade-in value, residual value percentage, interest rate, lease term, and local sales tax — and the calculator returns your exact monthly payment along with a clear breakdown of how much of that payment covers depreciation and how much covers the finance charge.

Leasing operates very differently from buying. When you take a car loan, you finance the full purchase price and gradually build ownership. When you lease, you pay only for the portion of the vehicle's value you consume during the lease term. That is why lease payments are typically lower than loan payments for an equivalent vehicle — but it also means you own nothing at the end unless you exercise a purchase option.

The key driver of any lease payment is the residual value — the estimated worth of the car at the end of the lease, set by the leasing company as a percentage of the original price. A sedan that holds its value well (high residual) is far cheaper to lease than a truck of the same price that depreciates quickly. Understanding this relationship lets you compare vehicles on a total-cost-to-lease basis rather than just sticker price.

The other critical variable is the money factor, which is simply the interest rate expressed in a compact format used by the leasing industry. Most dealers quote a money factor rather than an APR, which can obscure the true financing cost. Multiply the money factor by 2,400 to convert it to an approximate APR, then compare that figure against car loan rates from your bank using our APR Calculator.

Because both the residual value and money factor are set by the manufacturer's captive finance arm, they change monthly. Our car lease calculator lets you plug in any combination of these variables so you can evaluate different vehicles, different terms, and different dealership offers side by side — instantly.

How to use this Car Lease calculator

  1. Enter the Vehicle Price — use the MSRP or the negotiated selling price if you already have a dealer quote. The default of $35,000 represents a typical mid-range sedan. Adjust the slider to match the car you are evaluating.

  2. Set your Down Payment — enter the cap cost reduction you plan to pay upfront. If you prefer to minimise out-of-pocket exposure, set this to $0 to see the full lease payment without any cash down.

  3. Add your Trade-in Value — if you are trading in an existing vehicle, enter the estimated trade-in allowance. This reduces the net cap cost in the same way a down payment does. If you owe more on your current vehicle than it is worth, leave this at $0 and add the negative equity to the vehicle price manually.

  4. Enter the Residual Value percentage — the manufacturer's captive finance arm publishes residual values monthly. Ask the dealer for the current residual on the specific vehicle and term you are considering, or look it up on third-party leasing resources. Typical 36-month residuals range from 45% to 65% depending on the model.

  5. Set the Interest Rate (APR) — convert the money factor quoted by the dealer to APR by multiplying by 2,400. Enter that figure here. If no money factor has been quoted, use current advertised lease APRs as a benchmark.

  6. Select the Lease Term — 36 months is the most common choice and usually aligns with full manufacturer warranty coverage. Shorter terms (24 months) mean higher monthly payments but faster refresh; longer terms (48–60 months) spread depreciation further but may carry post-warranty risk.

  7. Enter your Sales Tax Rate — check your state or local tax authority for the exact rate on vehicle leases. Rates vary significantly by state, with some jurisdictions taxing monthly payments and others taxing the full cap cost upfront.

  8. Review the breakdown — examine the Depreciation Fee and Finance Fee separately before focusing on the Monthly Payment. If either figure seems disproportionate, adjust the cap cost or verify the money factor and residual before accepting a dealer offer.

Formula & Methodology

The car lease payment formula has four sequential steps:

Step 1 — Net Capitalised Cost (Net Cap Cost)

Net Cap Cost = Vehicle Price − Down Payment − Trade-in Value

Step 2 — Residual Value

Residual Value = Vehicle Price × (Residual % ÷ 100)

Step 3 — Monthly Fees

Depreciation Fee = (Net Cap Cost − Residual Value) ÷ Lease Term

Money Factor = APR ÷ 2400

Finance Fee = (Net Cap Cost + Residual Value) × Money Factor

Step 4 — Monthly Payment with Tax

Monthly Payment = (Depreciation Fee + Finance Fee) × (1 + Tax Rate ÷ 100)

Variable definitions:

- Net Cap Cost — the negotiated selling price after subtracting the down payment and trade-in value
- Residual Value — the vehicle's projected worth at lease end, set by the leasing company
- Depreciation Fee — the portion of each monthly payment covering the vehicle's value consumed during the lease
- Money Factor — APR expressed in lease notation; multiply by 2,400 to convert to approximate APR
- Finance Fee — the monthly interest charge on the average of net cap cost and residual value
- Lease Term — contract length in months (24, 36, 48, or 60)

Worked example:

- Vehicle Price: $35,000
- Down Payment: $2,000
- Trade-in Value: $0
- Residual: 55% → $19,250
- APR: 6% → Money Factor = 6 ÷ 2,400 = 0.0025
- Lease Term: 36 months
- Sales Tax: 8%

Net Cap Cost = $35,000 − $2,000 − $0 = $33,000

Depreciation Fee = ($33,000 − $19,250) ÷ 36 = $13,750 ÷ 36 = $381.94/month

Finance Fee = ($33,000 + $19,250) × 0.0025 = $52,250 × 0.0025 = $130.63/month

Base Monthly = $381.94 + $130.63 = $512.57

Monthly Payment with tax = $512.57 × 1.08 = $553.57/month

Total over 36 months = $553.57 × 36 = $19,928.52

Assumptions: Sales tax is applied to the monthly payment (not the full cap cost), which is the treatment used by most US states. A small number of states tax the full cap cost upfront — check your local rules if the result differs from your dealer's quote. The formula assumes a single money factor for the full lease term with no rate changes. Acquisition fees and disposition fees, which vary by manufacturer, are not included in this calculation.

To compare the cost of leasing against financing the same vehicle, use our Loan Amortization Calculator to model the full payment and equity schedule of a purchase loan side by side.

Frequently Asked Questions

A car lease calculator is a tool that estimates your monthly lease payment based on the vehicle price, down payment, trade-in value, residual value, interest rate, and lease term. It breaks your payment into two components — the depreciation fee (how much value the car loses during your lease) and the finance fee (the cost of borrowing). Using a car lease calculator before visiting a dealership gives you an independent benchmark to evaluate any offer you receive.
When you lease a car, you pay for the portion of the vehicle's value you consume over the lease term — not the full price. The leasing company owns the car; you pay monthly to use it for an agreed period, typically 24 to 60 months. At the end of the lease you return the vehicle, purchase it at the pre-agreed residual value, or roll into a new lease. Because you are not financing the entire vehicle, monthly lease payments are generally lower than loan payments for the same car.
Residual value is the estimated worth of the vehicle at the end of the lease term, expressed as a percentage of the original MSRP. For example, a $35,000 car with a 55% residual value is expected to be worth $19,250 after three years. A higher residual value means you are financing less depreciation, which lowers your monthly payment. Residual value is set by the leasing company and is non-negotiable, but comparing residuals across similar vehicles can help you choose the cheapest car to lease.
The money factor is the interest rate on a lease expressed in a compact decimal form. To convert it to an approximate APR, multiply by 2,400 — so a money factor of 0.0025 equals roughly 6% APR. Dealerships sometimes quote the money factor rather than the APR, which makes it harder to compare against a traditional car loan. Always convert the money factor to APR before comparing a lease offer with the cost of financing a purchase.
When you buy, you build equity with every payment and own the asset outright once the loan is repaid. When you lease, your payments cover only the depreciation and finance charges during the term, leaving no ownership stake at the end. Buying generally costs more per month but creates long-term value; leasing offers lower monthly payments and regular access to newer models, but you never own the vehicle unless you exercise the purchase option at the end. Use our [APR Calculator](/apr-calculator/) to compare the true cost of a car loan against a lease offer.
The monthly payment has two parts: the depreciation fee and the finance fee. The depreciation fee equals the net capitalised cost minus the residual value, divided by the lease term in months. The finance fee equals the sum of the net capitalised cost and residual value, multiplied by the money factor (APR ÷ 2,400). Add both fees together, then apply your local sales tax rate, to arrive at the final monthly payment.
The capitalised cost — often shortened to cap cost — is the agreed selling price of the vehicle that forms the basis of your lease calculation. The net capitalised cost is the cap cost after subtracting your down payment (called a cap cost reduction) and any trade-in allowance. Negotiating a lower selling price directly reduces the net cap cost, which lowers both your depreciation fee and your finance fee, cutting your monthly payment more effectively than a down payment does.
A down payment on a lease (cap cost reduction) lowers your monthly payment, but unlike a loan, you do not recover that money if the vehicle is totalled or stolen — your gap insurance covers the payoff, not your out-of-pocket cap cost reduction. Many financial advisers recommend minimising the down payment on a lease for this reason, instead using the cash elsewhere or increasing monthly cash flow. If keeping the monthly payment low is a priority, a small down payment can help, but evaluate the trade-off carefully.
A longer lease term spreads the depreciation over more months, which lowers the monthly depreciation fee. However, a longer term may also mean a lower residual value percentage (since the car depreciates more), partly offsetting the savings. The 36-month lease is the most common term because it typically aligns with manufacturer warranty coverage, meaning the car is under warranty for the entire lease. Shorter terms like 24 months usually have higher residuals but fewer months over which to spread the depreciation.
Yes — the selling price (cap cost), money factor, and sometimes the disposition fee are all negotiable. The residual value is set by the leasing company and cannot be changed. Negotiating the cap cost is the highest-leverage action: every $1,000 reduction in the selling price saves you roughly $28 per month on a 36-month lease (before the finance fee effect). Always research the invoice price and competitive offers before entering negotiations.
Your trade-in vehicle's value is applied as a cap cost reduction, just like a down payment. It lowers the net capitalised cost, which reduces both the depreciation fee and the finance fee portion of your monthly payment. If you owe more on your current vehicle than it is worth (negative equity), that difference is typically rolled into the new lease cap cost, increasing your monthly payment. Check your current loan payoff against the trade-in value before negotiating.
Sales tax treatment on leases varies by state. Most states (including California, New York, and Texas) tax each monthly payment as it is made, rather than taxing the full purchase price upfront — which is a cash-flow advantage over buying. A few states, such as Texas, tax the full capitalized cost at lease signing. Enter your local sales tax rate into the Sales Tax Rate field to include the correct monthly tax in your payment estimate. Check your state's Department of Motor Vehicles or a tax advisor for the exact rule in your state.
Also known as
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