Auto Lease Calculator

This free calculator allows you to determine your monthly auto lease payments and provides you with an effective method to estimate what your total lease payments will be as well as your net capitalized costs, lease fees, depreciation and residual asset value.

To use the calculator, simply enter the manufacturer's suggested retail price (MSRP) of your vehicle followed by the sale price, residual factor, lease length (in months) and further details when prompted. The calculator will now be able to give you the answers you need.

Leasing a Car

When you sign a contract to lease a car, you are entering into a legally binding agreement that gives you the right to use that vehicle for a set amount of time and given certain terms and conditions. As the holder of the lease, you are required to make a down payment followed by set monthly payments. It is also your responsibility to take care of the car up until the end of the lease. When the lease ends, you return the vehicle to the granter of the lease.

Car Lease Payment Calculator

or APR: %


Calculating your monthly payments


A drop in a vehicle's value over time cannot be avoided. This is why depreciation is taken into account when a lessor is establishing a lease contract. To illustrate, assume that vehicle A is worth $30,000 new off the lot, but in three years' time its value has dropped to around $20,000. This represents a depreciation value of $10,000, which will be considered when the monthly lease payments for vehicle A are determined.

It is important to remember that mileage has a significant impact on deprecation value, with cars that are used more being worth less.

The following formula is used to calculate the depreciation value of a vehicle:
(capitalized cost - residual value) / term of the lease = depreciation value

Capitalized cost:

A vehicle's capitalized cost it the total amount financed by the lease. This includes the final vehicle price (typically the MSRP is negotiated down) as well as any credit from a trade-in, rebates and down payment reductions.

Residual value:

A vehicle's residual value is how much it will be worth when the lease comes to an end. Standard practice is for the lessor to provide you with the residual value or a residual percentage to apply against the vehicle's MSRP.

Term of the lease:

Typically, the duration of a lease is from three to five years.


Monthly lease payments can be severely impacted by interest rates, so it is vital to consider interest rates before signing a lease agreement. High interest rates equate to high monthly repayments.

The "money factor" is sometimes used by car dealerships to calculate the monthly interest owed. When determining your monthly lease payment, it is important to consider the impact of interest and add it to the vehicle's depreciation value.

The formula used by dealerships to calculate the interest owed each month is as follows:
(capitalized cost + residual cost) × money factor = interest owed monthly

There are two ways to calculate the money factor. Firstly, the interest rate can be used. Dividing the interest rate by 2,400 will give you the money factor. Secondly, the lease charge can be used, in which case the following formula is applied:
lease charge / [(capitalized cost + residual value) × term of lease] = money factor


Remember to take taxes into account when you're thinking about leasing. Although taxes are often forgotten, by factoring them in, you will know your full monthly expenses when leasing a vehicle.

Taxes are payable on the depreciation and interest costs. Importantly, states have differing sales taxes so ensure you are aware of the tax situation where you are leasing (find the sale tax that applies in your state HERE).

To calculate your taxes, apply the formula below:
(depreciation cost + interest) × sales tax = monthly tax amount

Total monthly payments

Once you have figured out the values mentioned above (i.e. depreciation value, interest owed and taxes owed), you will be able to determine what your car lease agreement will really cost you every month. Simply add all the figures together:
depreciation value + interest owed + tax owed = total monthly payments

By taking the time to find the information you need, you can accurately calculate your monthly car lease payments and ensure that you get a deal that won't leave a hole in your wallet.

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