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Auto Lease Payment Calculator

Lease payment broken into depreciation, finance and tax. A money factor multiplied by 2,400 gives the equivalent APR, which is the only way to compare a lease against a loan.

Also called: lease payment calculator, money factor to apr.

$
$
%
%
$
Monthly payment
$647.64

$647.64 a month: $466.67 of depreciation, $138.60 of finance and $42.37 of tax. The money factor of 0 is equivalent to 5.28% APR. Over 36 months you pay $26,314.87 and own nothing. A higher residual lowers the payment because you are renting less of the vehicle value.

Depreciation component
$466.67
Finance component
$138.60
Tax component
$42.37
Money factor as APR
5.28%
Residual value
$23,100.00
Total lease cost
$26,314.87
Capitalised cost
$39,900.00
On the residual
A higher residual lowers the payment because you are renting less of the vehicle value.
How this is calculated
Method and background

This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for United States change on a published schedule; the effective date is shown on every rule-based tool.

How this is calculated

A lease charges for the depreciation you use plus a finance charge on the money tied up. The finance charge uses the sum of capitalised cost and residual rather than the difference, because the lessor has capital committed throughout. The money factor is the disguised interest rate: multiply by 2,400 to get the APR, which is the number to compare against a loan. A high residual lowers the payment, since you are renting less of the car's value.

the depreciation and finance charges are computed separately, and the finance charge uses the sum rather than the difference
C
Capitalised cost
R
Residual
MF
Money factor

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

a 36 month lease

Negotiated price
$42,000.00
Down payment or capitalised cost reduction
$3,000.00
Residual value
55%
Money factor
0
Lease term
36
Sales tax on the payment
7%
Acquisition and other fees
$900.00

Monthly payment$647.64

Capitalised cost is 42,000 less the 3,000 down plus 900 of fees. The residual is 55% of 42,000. Depreciation is (39,900 - 23,100)/36 = 466.67, the finance charge is (39,900 + 23,100) x 0.0022 = 138.60, and 7% tax on the 605.27 sum gives 647.64. The money factor converts at x 2400, so 0.0022 is 5.28% APR. Worked separately.

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a zero money factor removes the finance charge

Negotiated price
$42,000.00
Down payment or capitalised cost reduction
$3,000.00
Residual value
55%
Money factor
0
Lease term
36
Sales tax on the payment
7%
Acquisition and other fees
$900.00

Monthly payment$499.33

boundary: a genuine zero-percent lease charges depreciation and tax only, so the payment is 466.67 x 1.07 = 499.33

Open this example

Method and limits

What it assumes

  • Tax charged on the monthly payment, which varies by jurisdiction.

What it deliberately does not model

  • Mileage limits and excess wear charges are not included and can be substantial.
  • Early termination is usually expensive and sometimes not permitted.
  • Some jurisdictions tax the full capitalised cost rather than the payment.

Formula version 1.0.0 · definition 1.0.0 · United States · Report a problem with this calculator

Frequently asked questions

What is a money factor?
The interest rate in disguise. Multiply by 2,400 to get the APR: 0.0022 is 5.28 percent, which is the figure to compare against a loan.
Why does the finance charge use the sum, not the difference?
Because the lessor has capital committed across the whole term, from the full cost at the start to the residual at the end. The sum approximates twice the average balance.