Car Lease Calculator
This car lease calculator breaks your monthly payment into its two real components — depreciation and the 'rent charge' (lease interest) — using the actual money factor formula dealers use, not a rough approximation. Enter your lease terms to see exactly where your payment comes from.
The negotiated price used as the starting point for the lease.
Any upfront amount you pay to lower the capitalized cost.
What the leasing company expects the car to be worth at lease-end, as a percentage of its price — check your lease offer for this.
Length of the lease.
The lease's interest rate, expressed as a small decimal — multiply by 2,400 to get the equivalent APR (e.g. 0.00125 ≈ 3% APR).
Applied to the monthly payment in most US states.
Monthly lease payment
$479
How to use this car lease calculator
- 1Vehicle price and down payment: the capitalized cost and any upfront reduction.
- 2Residual value: check your specific lease offer — this is set by the leasing company, not negotiable the way price is.
- 3Money factor: also on your lease offer, usually a small decimal like 0.00125 — multiply by 2,400 to see the equivalent APR for comparison.
Understanding your results
The depreciation portion covers the vehicle's expected loss in value over the lease term — this is the biggest lever you control, since it shrinks with a bigger down payment or a higher residual value. The rent charge is effectively the lease's interest cost, calculated on the average of the capitalized cost and residual value across the term.
The formula
Payment = (Cap cost − Residual) ÷ Term + (Cap cost + Residual) × Money factorDepreciation is simply the value lost (capitalized cost minus residual value) spread evenly across the lease term. The rent charge multiplies the money factor by the sum of the capitalized cost and residual value (not just the capitalized cost) — this is the standard leasing-industry formula, and it's why a lower money factor matters just as much as a lower price.
A worked example
A $35,000 car with a $2,000 down payment, 55% residual (56% of that is $19,250 in residual after applying it to $35,000... more precisely $19,250), a 36-month term and a 0.00125 money factor: depreciation is about ($33,000 − $19,250) ÷ 36 ≈ $382/month, and the rent charge is ($33,000 + $19,250) × 0.00125 ≈ $65/month — a base payment around $447, plus tax.
Notes for the UK, US and India
A lower money factor and higher residual value both shrink your payment — negotiate the vehicle price the same way you would for a purchase, since a lower capitalized cost reduces both the depreciation and rent charge components. Some manufacturers subsidize the money factor or residual value on specific models as an incentive, which can make leasing unusually competitive on those cars specifically.
Frequently asked questions
Why is my lease payment based on the residual value too?+
The rent charge (lease interest) is calculated on the average of the capitalized cost and residual value, not just the amount you're 'borrowing' — this is standard leasing math, different from how loan interest works.
Can I negotiate the residual value?+
No — the leasing company (usually the manufacturer's captive finance arm) sets this based on expected depreciation for that model. You can negotiate the vehicle price and sometimes the money factor.
What happens if the car is worth more than the residual value at lease-end?+
You can often buy it at the (lower) residual price and resell it, or trade it in and capture the difference as equity toward a new lease or purchase — this is a source of value some lessees miss.