Auto Lease Calculator

About Auto Lease Calculator

The Auto Lease Calculator helps you estimate your monthly lease payments and total lease costs based on the vehicle price, lease term, money factor (interest rate), down payment, trade-in value, and other factors. Leasing a car can be a cost-effective alternative to buying, especially if you prefer driving a new vehicle every few years.

How to Calculate Lease Payments

To calculate your lease payment:

1. Determine the Depreciation Amount: Subtract the residual value (estimated value at lease end) from the capitalized cost (vehicle price minus down payment and trade-in).
2. Calculate the Monthly Depreciation: Divide the depreciation amount by the number of months in the lease term.
3. Calculate the Finance Charge: Add the capitalized cost and residual value, then multiply by the money factor.
4. Add Taxes and Fees: Include sales tax on the monthly payment and any additional fees.
5. Total Monthly Payment: Add the monthly depreciation, finance charge, and taxes/fees.

Key Lease Terms

Money Factor: This is essentially the interest rate on your lease. To convert it to an approximate APR, multiply by 2400 (e.g., 0.00208 × 2400 = 5% APR).

Residual Value: The estimated value of the vehicle at the end of the lease term, expressed as a percentage of MSRP or a dollar amount.

Capitalized Cost: The negotiated price of the vehicle minus any down payment, trade-in value, or rebates.

Down Payment: Reduces the capitalized cost and thus lowers your monthly payments, but consider whether it's the best use of your money.

Lease vs. Buy Considerations

Leasing may be a good option if:

• You prefer driving a new car every few years
• You want lower monthly payments compared to buying
• You don't want to deal with selling the car later
• Your business can deduct lease payments

Buying may be better if:

• You plan to keep the car long-term
• You drive more miles than lease terms allow
• You want to customize or modify your vehicle
• You want to build equity in the vehicle