Car Lease Calculator


Total Monthly Payment

Capitalized cost
Lease price
Residual value
Depreciation fee
Lease fee
Pre-tax monthly payment
Monthly usage tax

Know More About Car Leasing

A car lease calculator is the best way to determine your monthly payments. It simplifies the cost-determination process and helps you approach the car dealership from an informed position. has a simple car lease calculator that requires you to input several vital factors and get a final price.

How do you use a car lease calculator? What parameters do you input in the calculator to determine the final price of a vehicle? Here we discusses car lease calculators in greater detail to help you understand what it takes to use them.

How to Calculate Car Lease Payments

Many variables go into calculating the cost of a car lease. They include the vehicle’s current price, estimated value when the lease ends, the lease term, and the interest rate. However, many dealerships have several types of fees in the overall cost.

The following are the key variables that go into determining the cost of a lease:

1. Vehicle’s Price:

The price of the car is the total amount offered by the dealership for the vehicle. It includes all other aspects that go into determining the cost of the car. In the car lease calculator, it is a result rather than a factor in the calculation.

2. Down Payment

The down payment, drive-off fee, or capitalised cost reduction is the amount paid upfront for leasing a car. It takes care of part of the vehicle’s value and affects how much you will pay monthly. Therefore, making a larger down payment is one of the best ways to reduce your monthly costs on the lease.


The manufacturer’s suggested retail price (MSRP) refers to what you would have paid if you had bought the vehicle in cash. Based on the MSRP, the dealership calculates the expected depreciation on the car. Therefore, the MSRP is critical in determining how much you will pay for the vehicle after leasing it.

4. Residual Value

A vehicle’s residual value is how much it will be worth when the lease ends. It is usually a percentage of the MSRP and depends on how long the lease term shall be. The value of the lease is usually the MSRP minus the residual value. Interest is then calculated on the value of the lease before determining the monthly payments.

5. Money Factor

The money factor is the interest charged on the vehicle’s lease value. Car lease calculators use the money factor to determine the cost of the lease. The money factor is usually given as a decimal. Multiplying the money factor by 2400 results in the annual percentage rate (APR). For most people, the APR is much easier to understand.

A satisfactory credit score allows you to get a better money factor. That essentially translates to much lower monthly payments than would otherwise be possible. However, you can negotiate the money factor if it’s too expensive.

6. Depreciation

Vehicles lose value soon after leaving the showroom. Regular use causes inevitable wear and tear. The process of a car losing value over time is called depreciation. Most vehicles depreciate by nearly 20% in the first years and 60% within five years. The vehicle’s depreciation over the lease term is the same as the value of the lease.

7. Lease Fees

Besides the primary variables, several fees go into calculating the cost of leasing a car. A typical car lease calculator incorporates these fees to determine how much you’ll pay on the lease. The following are some of the fees paid on a car lease:

  • Acquisition Fee: The acquisition fee is one of the administrative costs of constructing a car lease. It can range from $300 to $1,000 and cannot be negotiated. You could either pay it upfront or roll it into the monthly payments. However, you’ll pay interest if you pick the second option.
  • Disposition Fee: The disposition or return fee covers administrative processing and vehicle cleaning at the end of the lease. Once you return the vehicle to the dealer, they use the money to restore it to sellable condition.

8. Lease Term

The lease term is the length of time the lease should last. It usually ranges between 24 and 60 months. The longer the lease term, the more affordable the lease payments.

9. Sales Tax

Sales tax is a crucial factor when it comes to calculating the monthly payments on a lease. The sales tax rate depends on the state government and could start from 0% of the price. It’s always good to check if your state imposes a sales tax.

How Lease Calculator Works

Say we intend to lease a vehicle valued at $28,000. We negotiate the price to $25,000 and make a $1,000 down payment on a 24-month lease. The car’s value at the end of the lease is $12,500 on a 0.001875 money factor (4.5% ARP). After factoring in a $479.17 depreciation fee, $68.44 lease fee, and $38.33 monthly usage tax, the monthly payment comes to $585.94.

The Bottom Line

Our car lease calculator makes it easy to determine how much you’ll pay on a car lease. All you need is to input figures for the different factors determining the cost of a lease. After clocking Calculate, you should be able to see the actual monthly payments.


How is a lease payment calculated?

A lease payment is calculated by factoring in the MSRP, residual value, negotiated selling price, down payment, capitalised cost, and depreciation. A car lease calculator makes it easier to determine car lease costs using these factors.

Is leasing a car good?

Yes, leasing a car is good since it enables you to drive it for several months without owning it. Leasing is more affordable than car financing and can allow you to drive newer vehicles more often.

What is the money factor on a car lease?

The money factor refers to the charge or interest on the value of a leased car. It exists in terms of a decimal factor, which, multiplied by 2,400, results in the APR. The money factor depends on your credit rating and is negotiable.

Is a down payment a must on a car lease?

No, a down payment isn’t compulsory on a car lease and could be a requirement for those with poor credit. If your credit is good, you have no reason to worry about making a down payment. A larger down payment reduces the monthly payments.

Is the residual value significant in calculating car lease payments?

Yes, the residual value is essential in calculating car lease payments. The difference between the vehicle’s current value and the residual value is the cost of the lease. Once the money factor is applied, the result is the total monthly payments.