Auto Lease CalculatorFree online financial calculator — instant results, no sign-up
Monthly lease payment from price, residual and money factor.
Estimates only, based on the inputs and assumptions shown. This is not financial, investment, tax, or legal advice. Prices, rates and local rules may change; crypto scenarios do not predict returns. Confirm important decisions with a qualified professional.
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About the Auto Lease Calculator
This calculator estimates your total monthly auto lease payment by breaking down depreciation, finance charges, and local sales tax. Prospective car buyers and lessees use it to analyze dealer lease sheets, compare terms, and check the math behind advertised monthly lease specials.
- Negotiated price
- Agreed selling price of the vehicle (capitalized cost before down payment), in dollars; typically $15,000 to $120,000.
- Down payment
- Upfront cash reduction applied toward the vehicle capitalized cost, in dollars; typically $0 to $10,000.
- Residual value
- Vehicle's projected worth at the end of the lease as a percentage of the negotiated price; typically 45% to 65%.
- Interest rate
- Annual interest rate (APR) charged on the lease, in percent; typically 2% to 12%.
- Term
- Duration of the lease agreement, in months; typically 24, 36, 39, or 48 months.
- Sales tax
- Local sales tax rate applied to monthly lease payments, in percent; typically 0% to 10%.
Formula and method
Cap = Price - Down Res = Price × (Residual% / 100) MF = Rate% / 2400 Depreciation = (Cap - Res) / Term Finance = (Cap + Res) × MF Monthly Payment = (Depreciation + Finance) × (1 + Tax% / 100)
- CapAdjusted capitalized cost (negotiated vehicle price minus down payment)
- ResResidual value in dollars at lease expiration
- MFMoney factor, equivalent to annual interest rate divided by 2,400
- TermLease duration in months
- Tax%Monthly sales tax rate percentage
The tool converts the annual interest rate into a standard lease money factor by dividing the percentage by 2,400. It calculates the net vehicle depreciation over the lease term and multiplies the combined capitalized cost and residual value by the money factor to establish the monthly rent charge. Total monthly payment is the sum of depreciation and finance charges multiplied by the sales tax percentage.
Worked example
These are the calculator's starting values and the results it actually produces for them.
Inputs
- Negotiated price35000 $
- Down payment2000 $
- Residual value58 %
- Interest rate6 %
- Term36 months
- Sales tax7 %
Results
- Depreciation fee$352.78
- Finance fee$133.25
- Monthly payment (incl. tax)$520.05
- Money factor0.0025
How to use the Auto Lease Calculator
- 1Subtract down payment from negotiated price to find adjusted cap cost, and calculate dollar residual value.
- 2Divide total depreciation (adjusted cap cost minus residual value) by the number of lease months.
- 3Convert interest rate to money factor (APR / 2400) and multiply by the sum of adjusted cap cost and residual value.
- 4Add the monthly depreciation and finance fee together, then apply the sales tax rate to get the final monthly payment.
Reading your result
The depreciation fee reflects the actual vehicle value consumed during your term, while the finance fee represents the borrowing cost (rent charge) paid to the leasing company. Comparing these figures shows how much of your payment goes toward using the car versus financing costs.
Limitations
This model calculates sales tax as an add-on to each monthly payment, which applies in most US states but excludes jurisdictions that tax the full purchase price or total lease payments upfront. It also excludes acquisition fees, disposition charges, registration costs, and dealer documentation fees.
Common questions
Why is the interest rate divided by 2,400 to find the money factor?+
The money factor formula divides the annual percentage rate by 12 to make it monthly, and then by 2 to average the starting balance and ending residual balance, and finally by 100 to convert from percentage to decimal (12 × 2 × 100 = 2,400).
How does a higher residual value affect the lease payment?+
A higher residual value reduces your monthly payment because the vehicle is predicted to lose less value over the term, resulting in lower total depreciation.
Should I put a large down payment on a car lease?+
While a larger down payment reduces monthly payments, financial experts often recommend minimizing cash down on a lease; if the car is totaled or stolen early in the lease, upfront cash is rarely recovered.
Does the calculator save my information?+
Calculations run in your browser. While signed in, inputs and results are automatically recorded in account history; saving a result creates a separate saved record.
Further reading
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Results are estimates for informational purposes and are not financial, medical or legal advice.