Auto Lease Calculator
Leasing a car can look deceptively simple: choose a vehicle, agree on a monthly payment, and drive away.
The number that matters, however, is not just the advertised monthly payment.
An auto lease can involve the vehicle’s negotiated price, expected value at the end of the lease, lease term, money factor, trade-in credit, rebates, taxes, fees, and money paid at signing. This Auto Lease Calculator brings those pieces together so you can estimate the monthly payment and see where the number comes from.
Enter your vehicle and lease details below to get an estimate.
Auto Lease Calculator
Estimate your monthly lease payment and see how depreciation, financing, taxes and upfront costs affect the deal.
Payment breakdown
How a car lease payment is calculated
A simplified lease calculation starts with the vehicle’s adjusted capitalized cost and its expected residual value.
1. Find the adjusted capitalized cost
The negotiated vehicle price is the starting point.
Depending on the lease, rebates, trade-in credits, or other capitalized amounts can change the amount being financed through the lease.
A simplified representation is:
Adjusted Capitalized Cost = Capitalized Cost − Capitalized Cost Reduction
The terminology matters because a capitalized cost reduction is essentially an amount that reduces the cost being capitalized over the lease.
2. Estimate depreciation
The vehicle is expected to be worth less at the end of the lease than it was at the beginning.
So:
Depreciation = Adjusted Capitalized Cost − Residual Value
The depreciation amount is then spread across the number of monthly payments.
3. Add the lease finance charge
A lease also includes a financing component commonly represented by the money factor.
A simplified version of the rent-charge calculation is:
Rent Charge = (Adjusted Capitalized Cost + Residual Value) × Money Factor
4. Combine the pieces
A simplified base monthly payment can therefore be represented as:
Monthly Payment = Monthly Depreciation + Monthly Rent Charge
Taxes and applicable fees can then increase the amount actually paid.
The exact calculation used in a lease contract can be more complicated than this simplified model, particularly when taxes, fees, rebates, acquisition charges, trade-ins, and other amounts are incorporated differently.
What is residual value?
Residual value is the estimated value of the vehicle at the end of the lease.
For example, suppose a car has:
- Adjusted capitalized cost: $40,000
- Residual value: $24,000
- Lease term: 36 months
The simplified depreciation component would be:
$40,000 − $24,000 = $16,000
Spread across 36 months:
$16,000 ÷ 36 = $444.44 per month
The actual payment would also include the lease’s financing charge, plus applicable taxes and fees.
Residual value is particularly important because it directly affects the amount of vehicle depreciation being paid during the lease. The CFPB notes that the residual value is used in calculating the periodic payment and can also affect the amount due if a purchase option is exercised.
What is a money factor?
The money factor is a number used to calculate the financing or rent charge on a lease.
It may look very different from the interest rate you’re accustomed to seeing on an auto loan.
For example, a lease might quote a money factor such as:
0.00200
rather than displaying a conventional percentage interest rate.
Because the money factor can materially affect the lease payment, it is useful to enter the actual factor from the lease quote rather than guessing it.
When comparing lease offers, make sure you’re comparing the same vehicle price, term, mileage allowance, residual assumptions, upfront payments, taxes, fees, and other major terms. A lower advertised monthly payment does not necessarily mean the underlying lease has the same cost structure.
Auto lease calculator with trade-in
A trade-in can change the amount being applied toward the lease.
If the trade-in has positive equity, some or all of that value may be applied to the transaction depending on the contract.
However, trade-in situations become more complicated when the existing vehicle has an outstanding loan balance.
For that reason, don’t automatically treat the full trade-in value as a discount. The amount owed on the old vehicle and the actual trade-in allowance both matter.
The calculator lets you account for a trade-in when estimating the lease.
What happens if you put money down on a lease?
A larger upfront payment can reduce the amount incorporated into the monthly payment.
That can make the advertised monthly payment look considerably lower.
But it is important to distinguish between:
monthly payment
and
total amount paid
For example, paying several thousand dollars at signing can reduce a monthly payment without reducing the overall cost by the same amount.
For comparison purposes, look at both numbers:
Amount due at signing + total monthly payments
Consumer lease disclosures distinguish the amount due at signing from periodic payments and the total amount of payments.