Car Lease Calculator

How this calculator works

The net capitalized cost is the negotiated selling price minus your cap-cost reduction (down payment) and any manufacturer rebates. The residual value is a percentage of MSRP, as leasing companies set it. The base payment is the monthly depreciation plus the rent charge, and sales tax is either added to each payment or, where your state taxes leases upfront, charged at signing on the total of all payments. The acquisition fee is treated as paid at signing and the disposition fee as paid when you return the car. Leasing companies' own figures (and state tax rules) can differ, so treat the result as an estimate to check against the dealer's lease worksheet.

By Suhaib Hassan · Formula verified 27 Sep 2026 · How CalculatePilot verifies formulas →

How lease payments are structured

A lease payment has two components: a depreciation fee (covering the value the car is expected to lose during your lease) and a finance fee (essentially interest on the money tied up in the vehicle, similar to loan interest). This calculator breaks out both parts so you can see where your payment actually goes.

The residual value — what the car is predicted to be worth at lease end — is set by the leasing company based on the vehicle's expected depreciation curve. A higher residual value means less depreciation to pay for during the lease, which generally means a lower monthly payment.

Understanding money factor and APR

Leasing companies typically quote a 'money factor' rather than an APR, which can make comparing lease offers to loan offers confusing. Money factor converts to APR by multiplying by 2400 — so a money factor of 0.00125 equals roughly a 3% APR. This calculator takes the money factor directly and shows the equivalent APR next to it.

A lower money factor (or APR) directly reduces the finance fee portion of your payment — for well-qualified buyers, this is often negotiable, similar to negotiating an interest rate on a car loan. If buying makes more sense for you, run the same vehicle through our Auto Loan Calculator for a side-by-side comparison.

Worked example: the default lease, step by step

A $48,000 MSRP car negotiated to $44,500, with $2,500 down, a $1,000 rebate, a 56% residual, a 36-month term, a money factor of 0.00225 and 8% sales tax added to each payment.

• Net capitalized cost = 44,500 − 2,500 − 1,000 = $41,000
• Residual = 48,000 × 56% = $26,880
• Depreciation = (41,000 − 26,880) ÷ 36 = $392.22
• Rent charge = (41,000 + 26,880) × 0.00225 = $152.73
• Base payment = $544.95; with 8% tax the payment is $588.55
• Equivalent APR = 0.00225 × 2,400 = 5.4%

What moves the monthly payment most

Change in the default payment of $588.55 (tax included) from one change at a time:

Change	Payment change before tax	Payment change with 8% tax
Negotiate $1,000 off the price	−$30.03	−$32.43
Put $1,000 more down	−$30.03	−$32.43
Raise the residual by 1 point (57% of MSRP)	−$12.25	−$13.23
Lower the money factor by 0.00025	−$16.97	−$18.33

Lowering the price or adding the same amount down cuts the payment by about $30 for each $1,000, so both work through the same capitalized cost. A lower money factor helps less, and a higher residual helps least per point, but each is worth asking about.

How lease term changes the payment

Longer leases usually come with a lower residual percentage. These residuals are illustrations; your lease will state its own.

Term	Residual used	Monthly payment (with tax)
24 months	62%	$677.75
36 months	56%	$588.55
48 months	50%	$540.45

Money factor to APR chart

Multiply the money factor by 2,400 to get the equivalent APR. Payment figures use the default car above.

Money factor	Equivalent APR	Monthly payment (with tax)
0.00100	2.4%	$496.91
0.00150	3.6%	$533.57
0.00200	4.8%	$570.22
0.00225	5.4%	$588.55
0.00250	6.0%	$606.88
0.00300	7.2%	$643.53

Lease fees to expect

• Acquisition fee: $895 in the default setup, paid at signing.
• Disposition fee: $395 in the default setup, paid when you return the car.
• Excess mileage: your contract sets a per-mile charge. For example, 3,000 excess miles at a hypothetical $0.25 a mile would cost $750.
• Wear and early termination: charged under your lease terms, so read them before signing.

The default 36-month lease costs about $24,978 in total ($2,500 down + $895 acquisition fee + 36 payments of $588.55 + $395 disposition fee), and you own nothing at the end.

Lease vs buy over 36 months

The comparison buys the same car at $43,500 after the rebate, with 10% down, 8% sales tax paid upfront and a 5.4% APR loan (the lease's equivalent rate). It assumes the car is worth the lease residual ($26,880) after 36 months.

	Lease	Buy, 36-month loan	Buy, 72-month loan
Monthly payment	$588.55 (with tax)	$1,180.40	$637.80
Cash at signing	$3,984 (down, fee, first payment)	$7,830	$7,830
Total cash paid over 36 months	$24,978 (incl. $395 disposition fee)	$50,325	$30,791
Loan balance after 36 months	None	$0	$21,154
Car value at month 36 (assumed = residual)	You return it	$26,880	$26,880
Net cost after counting the car's value	$24,978	$23,445	$25,064

Buying with a 36-month loan has the highest payment but the lowest net cost here, because you keep a car worth about $26,880. A 72-month loan lowers the payment but leaves a balance of about $21,154 at month 36. Results change with your price, rate, residual and tax rules.

At the end of the lease

• Return the car, pay any fees and walk away.
• Buy it for the residual price ($26,880 here) plus any fees and taxes. Compare this with the car's market value first.
• Start a new lease on another car.

Car lease guides

• How to calculate a car lease payment step by step
• Money factor to APR conversion chart
• Lease vs buy a car: total cost comparison
• Car lease fees and end-of-lease charges

Frequently asked questions

What's the difference between a money factor and an APR?expand_more

Money factor is a small decimal figure leasing companies use instead of a percentage rate — multiply the money factor by 2400 to get the roughly equivalent APR.

Does a higher down payment always lower my monthly lease payment?expand_more

Generally yes, since it reduces the capitalized cost being depreciated and financed — though putting a large down payment on a lease carries more risk than on a purchase, since that money isn't recoverable if the car is totaled early in the lease.

How do you calculate a car lease payment?expand_more

Monthly depreciation = (net cap cost − residual) ÷ term, plus rent charge = (net cap cost + residual) × money factor. For the default lease that is $392.22 + $152.73 = $544.95 before tax.

What is a good money factor for a lease?expand_more

Lower is better. Multiply the money factor by 2,400 to get the APR and compare it with a car loan rate. For example 0.00225 equals 5.4% APR.

What is the residual value on a lease?expand_more

It is what the leasing company expects the car to be worth at the end of the lease, usually set as a percentage of MSRP. A higher residual means less depreciation to pay for.

Is leasing cheaper than buying?expand_more

Monthly payments are often lower on a lease, but you own nothing at the end. In the default example the 36-month lease costs about $24,978 in cash, while buying on a 36-month loan nets out about $23,445 after counting the car's value.

What is the 1% rule for car leases?expand_more

A common rule of thumb says a monthly payment at or under 1% of MSRP is a strong deal. The default lease is about 1.23% of MSRP.

Does a bigger down payment lower my lease payment?expand_more

Yes, each $1,000 down lowers the default payment by about $32.43, but the money is not recoverable if the car is totaled early in the lease.

What fees come with a car lease?expand_more

Typically an acquisition fee at signing and a disposition fee at return, plus any charges for excess mileage, wear or early termination under your contract.

How does the lease term change the payment?expand_more

A longer term spreads depreciation over more months, so the payment is lower, but the residual percentage is usually lower too. With the illustrative residuals above, 24, 36 and 48 months give about $677.75, $588.55 and $540.45.

What happens at the end of a lease?expand_more

You can return the car and pay any fees, buy it for the residual price, or start a new lease.