Lease Payment Calculator
Lease quotes hide a lot behind one monthly number. Punch in the price, residual, money factor, and term, and see the payment split into the depreciation you're using up and the finance charge on top.
Estimate a monthly lease payment
A lease payment is really two parts: the depreciation you're using up, plus a finance charge. Plug in the numbers from the dealer and see them split out.
Monthly lease payment
$486.03
Before tax; taxes vary by state
Depreciation part
$352.78
Value you use up each month
Finance part
$133.25
The lease's rent charge
Equivalent APR
6.00%
Money factor × 2,400
The two halves of a lease payment
A lease payment is easier to trust once you see it broken apart. The first half is depreciation: the car's price minus its residual value, divided across the months. That's the chunk of the car you're actually using up and paying for.
The second half is the finance charge — think of it as rent on the money. It's the price plus the residual, multiplied by the money factor. Add the two halves and you've got the monthly payment.
Take a $35,000 car with a 58% residual, a 0.0025 money factor, 36 months, and $2,000 down. Depreciation runs about $330 a month, the finance charge about $118, so roughly $448 before tax. Bump the residual up and the depreciation shrinks; that's why cars that hold value lease cheaply.
Frequently asked questions
What is a money factor, really?
It's the lease world's version of an interest rate, just written as a tiny decimal. Multiply it by 2,400 and you get the rough APR. A money factor of 0.0025 is about 6% — handy for comparing a lease against a loan.
What does residual value mean?
It's what the leasing company expects the car to be worth when you hand it back, written as a percent of the sticker price. A higher residual means the car holds its value, so you're paying for less depreciation and your monthly payment drops.
How is a lease payment actually built?
Two pieces added together. The depreciation part is the value you use up, (price minus residual) spread over the months. The finance part is a rent charge, (price plus residual) times the money factor. Add them and that's your monthly, before tax.
Does a bigger down payment lower the payment?
It does, since your down payment reduces the amount being financed. But putting a lot down on a lease is risky — if the car is totaled early, you can lose that money. Many people keep the down payment small on purpose.
Why is the payment lower than a loan on the same car?
A loan pays off the whole car; a lease only covers the slice of value you use during the term. You're financing the depreciation, not the full price, which is why the monthly comes in lower even though you don't own it at the end.
Is tax included in the estimate?
No, this is the pre-tax payment. Sales tax on a lease varies a lot by state — some tax the monthly payment, others the whole thing up front — so add your local tax on top of the figure shown.