Car Lease Calculator
Estimate your monthly car lease payment based on vehicle price, residual value, term, and interest rate.
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 accepts APR directly and converts internally for the payment calculation.
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.
Frequently asked questions
What's the difference between a money factor and an APR?
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?
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.