What Is a Car Lease Payment Calculator?
This calculator estimates your monthly auto lease payment using the standard method common in the United States. A lease payment is made up of three parts: a depreciation fee (paying for the value the car loses while you drive it), a finance (rent) fee (the lessor's interest charge), and sales tax applied to the monthly amount. Note that tax treatment varies by state — some tax the full vehicle price up front rather than the monthly payment — so treat the result as an estimate.
How to Use It
Enter the capitalized cost (the negotiated price you agreed to pay), any down payment or cap cost reduction, and the residual value (what the car is worth at lease end, usually set by the leasing company). Add the lease term in months, the money factor (the lease's interest rate; multiply by 2400 to approximate the APR), and your local sales tax rate. The tool returns your monthly payment and a breakdown of each component.
The Formula Explained
First the net capitalized cost is found: $$C_{net} = \text{cap cost} - \text{down payment}$$ The depreciation fee is \(\frac{C_{net} - \text{residual}}{\text{term}}\). The finance fee is \((C_{net} + \text{residual}) \times \text{money factor}\). Add them for the base payment, then add tax: \(\text{base} \times \frac{\text{tax\%}}{100}\).
$$M = \left( \frac{C-R}{n} + (C+R)\cdot f \right)\left(1 + \frac{t}{100}\right)$$where
$$\left\{ \begin{aligned} C &= \text{Cap Cost} - \text{Down Payment} \\ R &= \text{Residual} \\ n &= \text{Term (months)} \\ f &= \text{Money Factor} \\ t &= \text{Tax Rate (\%)} \end{aligned} \right.$$
Worked Example
Cap cost $30,000, down payment $2,000, residual $18,000, term 36 months, money factor 0.00125, tax 7%. Net cap = $28,000. Depreciation = \(\frac{28{,}000 - 18{,}000}{36} = \$277.78\). Finance = \((28{,}000 + 18{,}000) \times 0.00125 = \$57.50\). Base = $335.28. Tax = \(\$335.28 \times 0.07 = \$23.47\). Monthly payment ≈ $358.75.
FAQ
What is a money factor? It's the lease equivalent of an interest rate. Multiply it by 2,400 to get the approximate APR — \(0.00125 \approx 3\%\).
Why does a down payment lower my payment? A cap cost reduction lowers the amount being financed, reducing both the depreciation and finance portions of every payment.
Is this exact for my state? No. Tax rules differ widely; some states tax the entire selling price, the down payment, or use other methods. Use this for planning and confirm with your dealer.
