Car Lease Calculator
A car lease payment is made up of two parts: a depreciation fee (the portion of the car's value used up over the lease) and a finance fee (interest expressed as a "money factor" instead of an APR). Toolverge calculates both fees from the negotiated capitalized cost, the residual value percentage, the money factor, and the lease term in months, and also converts the money factor into an approximate APR for comparison with loan offers.
Educational estimate only. Results are not medical, legal, or financial advice. Confirm important decisions with a qualified professional.
How it works
- Enter the capitalized cost (your negotiated price plus any fees rolled in).
- Enter the residual value percent, money factor, and lease term in months.
- Read the estimated monthly payment, split into depreciation and finance fee, plus an approximate APR.
Formula residual = capCost×residual%/100; depreciation fee = (capCost−residual)/term; finance fee = (capCost+residual)×moneyFactor
Frequently asked questions
What is a money factor?
A money factor is the lease equivalent of an interest rate, usually shown as a small decimal like 0.00125. Multiplying it by 2400 gives an approximate equivalent APR.
What is residual value in a lease?
Residual value is the car's predicted value at the end of the lease, expressed as a percent of the capitalized cost. A higher residual usually means a lower monthly payment.
What is the depreciation fee?
It is the portion of the monthly payment that covers the value the car is expected to lose during the lease: (capitalized cost − residual value) divided by the lease term.
Does this include sales tax on the lease?
No, this estimate covers depreciation and finance fees only; taxes and additional fees vary by location and are not included.
How do I compare a lease to buying?
Use the approximate APR shown here alongside the Auto Loan Calculator to compare the lease's monthly cost against financing a purchase.