Car Lease Calculator

A lease payment has two parts: the depreciation fee — (adjusted capitalized cost − residual value) ÷ lease term — and the finance fee — (adjusted cap cost + residual value) × money factor. Add them together (plus any tax) for your monthly payment.

The money factor is the lease's interest rate expressed as a small decimal. To convert it to an approximate APR, multiply by 2,400. For example, a money factor of 0.00125 is roughly 3% APR. Lower is better.

Residual value is the car's projected worth at the end of the lease, set by the leasing company as a percentage of the original price. A higher residual means less depreciation to pay for, which lowers your monthly payment.

Yes — a down payment (called a capitalized cost reduction) lowers the amount being financed and depreciated, reducing the monthly payment. However, if the car is totaled or stolen early, that upfront money is generally not refunded, so many advisors keep it small.

Leasing usually has lower monthly payments and lets you drive a newer car, but you don't build equity and face mileage limits and wear charges. Buying costs more per month but the car is yours once it's paid off. Compare total cost for your situation.