About the Auto Lease Calculator
This auto lease calculator uses the same method leasing companies use to build a monthly lease payment. You enter the MSRP, the price you negotiated (the capitalized cost), the residual percentage and money factor from the lender, the term, and anything you are putting down. It splits the payment into the depreciation fee, the finance (rent) charge and sales tax so you can see exactly what you are paying for.
Use it to check a dealer’s lease worksheet, to see how much a lower price or a bigger down payment changes the payment, or to convert a money factor into an equivalent APR. Because the residual is set as a percentage of MSRP, negotiating the selling price down is usually the most effective way to lower a lease payment.
Choose how your state taxes leases. Most US states tax each monthly payment. Some, such as California, also tax the cash down payment (capitalized cost reduction) at signing, and a few tax the full vehicle price upfront. The calculator models those three common methods using the negotiated price and your cash down payment. States differ on whether rebates, trade-in credit and fees are taxable, so treat the tax figures as an estimate and check your state revenue department’s rules. Acquisition fees are capitalized into the lease; mileage overage and disposition fees at lease end are not included.
With the default inputs, the monthly lease payment is $523.98. Change any value above to recalculate instantly.
How to use the auto lease calculator
- 1Enter the MSRP and the selling price you negotiated.
- 2Add any down payment, trade-in equity, rebates and the acquisition fee.
- 3Enter the residual percentage and money factor from the lender or dealer.
- 4Pick the lease term, your sales tax rate and how your state taxes leases.
- 5Review the monthly payment and the depreciation vs finance split.
Formula and method
A lease payment has two parts. The depreciation fee spreads the value the car loses — adjusted capitalized cost minus residual value — evenly over the term. The finance (rent) charge is the sum of the capitalized cost and residual multiplied by the money factor, which is the lease equivalent of an interest rate.
The adjusted capitalized cost is the negotiated price plus the acquisition fee, minus down payment, trade-in equity and rebates. The residual is MSRP × residual percentage. With the monthly method, sales tax is added to each payment. With the down-payment method, tax is also charged at signing on the cash down payment. With the upfront method, tax is charged once on the negotiated price and the monthly payment carries no tax. Rebates, trade-in credit and fees are not taxed in this model. The money factor × 2,400 gives an approximate APR for comparison with a loan.
- Cap
- Adjusted capitalized cost
- Residual
- MSRP × residual %
- n
- Lease term in months
- MF
- Money factor (APR ÷ 2,400)
Worked examples
$40,000 MSRP, 36 months, 58% residual
The adjusted cap cost is $37,000 + $695 − $2,000 = $35,695 and the residual is $23,200. Depreciation is $12,495 ÷ 36 = $347.08 and the finance charge is $58,895 × 0.0025 = $147.24, so the pre-tax payment is $494.32, or $523.98 with 6% tax.
Zero-down lease on a $32,000 car
With nothing down the cap cost is $31,150 against a $19,840 residual. Depreciation is $314.17 and the finance charge is $91.78 a month; 7% tax brings the payment to $434.37. The money factor of 0.0018 is roughly a 4.32% APR.
24-month lease with a rebate in a no-tax state
A short 24-month lease with a 52% residual means the car loses $19,895 of value in two years, so the depreciation fee alone is $828.96 a month. Finance charges total about $5,551 over the lease.
Same lease where the down payment is taxed at signing
The monthly payment is unchanged at $523.98, but 6% of the $2,000 down payment ($120) is due at signing, so the total cost of the lease rises from $20,863.28 to $20,983.28.
Same lease in a state that taxes the full price upfront
With no tax on the payments the monthly cost is the pre-tax $494.32, but 6% of the $37,000 price ($2,220) is due upfront. Over 36 months, with the $2,000 down, the lease costs $22,015.55, about $1,150 more than when only the payments are taxed.
Frequently asked questions
What is a money factor on a car lease?+
The money factor is the interest rate on a lease, expressed as a small decimal. Multiply it by 2,400 to get an approximate APR — a money factor of 0.0025 is about 6%. Dealers can mark it up above the lender’s base rate, so ask for the buy rate.
What is a good residual value?+
A higher residual means the car is expected to hold more value, so you pay less depreciation and a lower payment. Typical 36-month residuals run from about 50% to 65% of MSRP depending on the model and annual mileage allowance.
Should I put money down on a lease?+
A down payment lowers the monthly payment, but if the car is stolen or totaled, gap coverage pays the lender and your down payment is usually lost. Many buyers prefer to pay only the first month and fees at signing.
Can I negotiate a car lease?+
Yes. The selling price (capitalized cost) is negotiable just like a purchase, and so is the money factor markup. The residual value is set by the leasing company and is generally not negotiable.
How is sales tax charged on a lease?+
Most US states charge sales tax on each monthly payment. Some also tax the cash down payment at signing, and a few tax the full price of the vehicle upfront. Pick the matching method in the calculator; rules on rebates, trade-ins and fees vary by state.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.