Auto Lease Calculator
Estimate the monthly payment on a US car lease using the standard depreciation + finance charge + tax formula. Adjust vehicle price, residual, APR, term and tax to compare deals.
Monthly lease payment
£401.32
- Adjusted cap cost
- £28,000.00
- Residual value
- £16,500.00
- Monthly depreciation
- £319.44
- Monthly finance charge
- £55.63
- Pre-tax monthly payment
- £375.07
- Money factor
- 0
- Total of payments
- £14,447.68
- Total cost (with down payment)
- £16,447.68
An auto lease payment has three parts: depreciation (how much value the car loses while you have it, spread over the term), a finance charge (interest on the average outstanding balance, priced via the money factor), and sales tax on the sum of the two. A bigger down payment shrinks the depreciation and finance components but is at risk if the vehicle is totalled or stolen, since lessors generally do not refund it.
How to use this calculator
Enter the vehicle price (MSRP or negotiated price), any cash down payment, the residual value as a percentage (set by the leasing company — typical values are 50% to 60% over 36 months), the APR quoted by the lessor, the lease term in months, and your state sales tax rate. The calculator returns the monthly payment, plus the depreciation and finance charge components so you can see exactly where the money goes.
How the calculation works
A US auto lease payment is the sum of three things: monthly depreciation, monthly finance charge, and sales tax. Depreciation is the drop in value while you have the car, spread evenly across the term: (adjusted cap cost − residual) ÷ months. The finance charge is interest on the average outstanding balance: (adjusted cap cost + residual) × money factor, where money factor = APR ÷ 2400. Sales tax is applied to the sum of depreciation and finance charge. Adjusted cap cost is the vehicle price minus your down payment.
Worked example
On a $30,000 vehicle with a $2,000 down payment, 55% residual, 3% APR, 36-month term and 7% sales tax: adjusted cap cost is $28,000, residual is $16,500, monthly depreciation is ($28,000 − $16,500) ÷ 36 = $319.44, the money factor is 3 ÷ 2400 = 0.00125, monthly finance charge is ($28,000 + $16,500) × 0.00125 = $55.63, pre-tax payment is $375.07, and with 7% sales tax the monthly payment is about $401.32.
Frequently asked questions
How is an auto lease payment calculated?
The monthly payment on a US auto lease has three parts. (1) Depreciation: (vehicle price − down payment − residual value) ÷ term in months. (2) Finance charge: (vehicle price − down payment + residual value) × money factor, where money factor = APR ÷ 2400. (3) Sales tax is then applied to the sum of depreciation and finance charge. Add the three together and you have the monthly payment.
What is a money factor and how does it relate to APR?
The money factor is how leasing companies express the interest rate on a lease. To convert it to an APR, multiply by 2400. To convert an APR to a money factor, divide by 2400. So a 3.6% APR is a money factor of 0.0015, and a money factor of 0.00125 is a 3% APR. Always ask the dealer for the money factor — some salespeople multiply it by 1000 to make it look smaller than the APR it is equivalent to.
What is residual value and why does it matter?
Residual value is the leasing company's guess at what the car will be worth at the end of the lease, set when the lease is signed. It is usually quoted as a percentage of MSRP. A higher residual means less depreciation, which means a lower monthly payment — so high-residual cars (typically those that hold value well) tend to lease cheaply. Residual also matters at lease-end: if the car is worth less than the residual, you walk away; if it is worth more, you can buy it for the residual and resell at a profit.
Is a down payment on a lease a good idea?
Usually no. A down payment on a lease (sometimes called a capitalized cost reduction) lowers the monthly payment but does not build equity, because at lease-end you hand the car back. Worse, if the car is stolen or totalled in the first months of the lease, gap insurance pays off the lease but the down payment is generally not refunded. Most consumer guides recommend putting the smallest possible amount down on a lease — often only the first month plus fees.
How is a lease different from a loan?
A loan finances the entire vehicle price; at the end you own the car. A lease only finances the portion you use up — the difference between the price and the residual. That makes the monthly payment lower than a comparable loan, but you have nothing to show at the end and you face mileage limits (typically 10,000-15,000 miles per year) and excess-wear charges. Leases also do not let you sell or modify the car freely.
Does this calculator include all lease costs?
No. The calculator models the core monthly payment — depreciation, finance charge and sales tax. Real US leases also include an acquisition fee (usually $400-$1,000), a disposition fee at lease-end (if you do not buy the car), title and registration fees, and any state-specific upfront taxes on the down payment or rebates. Build those into your budget separately when comparing offers.