Auto Lease Calculator
Calculate your monthly auto lease payment, including the depreciation charge and finance charge, from capitalized cost, money factor, and residual value.
How It's Calculated
Formula
\text{Depreciation} = \dfrac{\text{Cap Cost} - \text{Residual}}{\text{Months}}, \quad \text{Finance} = (\text{Cap Cost} + \text{Residual}) \times \text{Money Factor}This calculator uses the standard automotive lease-payment formula: your monthly payment is a depreciation charge plus a finance charge. The depreciation charge spreads the vehicle's loss in value (capitalized cost minus residual value) evenly across the lease term. The finance charge applies the money factor to the sum of the capitalized cost and residual value — this is the standard industry method for computing a lease's interest-equivalent cost. This is a generic, deterministic estimate: it does not include sales tax, acquisition/disposition fees, or dealer-specific add-ons, and actual dealer quotes may differ. Confirm exact figures with your dealership or lessor before signing.
Worked Examples
$32,000 capitalized cost, $18,000 residual, 0.0025 money factor, 36-month term
- Depreciation charge = (32,000 − 18,000) / 36 ≈ $388.89/month
- Finance charge = (32,000 + 18,000) × 0.0025 = $125.00/month
- Monthly payment = 388.89 + 125.00 ≈ $513.89
0% money factor: $28,000 capitalized cost, $16,000 residual, 24-month term
- Finance charge = (28,000 + 16,000) × 0 = $0
- Monthly payment = depreciation charge only = (28,000 − 16,000) / 24 = $500.00
Frequently Asked Questions
What is a 'money factor', and how is it different from an interest rate?
A money factor is the small decimal figure (e.g. 0.0025) dealers use to compute a lease's finance charge — it isn't a percentage and isn't applied the same way an APR is. Enter it exactly as your dealer quotes it. This calculator does not convert an APR into a money factor for you, since that conversion isn't part of this tool's stated inputs.
Why do I need to enter the lease term separately from MSRP or cap cost?
The monthly depreciation charge depends on how many months the vehicle's value loss is spread across, so the lease term is required to compute a monthly figure at all — it isn't optional, even though it's a straightforward input with no ambiguity about how to use it (unlike residual value, which does require a policy decision).
Is MSRP used in the payment calculation?
No. MSRP is captured for reference (so you can see the sticker price alongside your negotiated capitalized cost), but the actual monthly payment formula is driven entirely by capitalized cost, residual value, money factor, and lease term.
How is this different from the generic Lease Calculator?
This calculator uses the automotive industry's standard depreciation-charge-plus-finance-charge formula, driven by a negotiated capitalized cost, a money factor, and a residual dollar amount. The generic Lease Calculator instead uses a stated annual interest rate amortized against a residual percentage of a generic asset's value — a different financing convention entirely.
Does this include sales tax or dealer fees?
No. This is a base lease-payment estimate only. Sales tax, acquisition fees, disposition fees, and other dealer-specific charges are not modeled and will vary by jurisdiction and dealership — always confirm the full out-the-door figure with your dealer.