Car Lease Calculator - Calculate Monthly Lease Payments
Free car lease calculator to determine monthly lease payments, total lease cost, and compare leasing vs buying options. Calculate lease payments with taxes and fees
Car Lease Calculator
Lease Payment Results
What is Car Leasing?
Car leasing is a financing option that allows you to drive a new vehicle for a set period (typically 2-4 years) by making monthly payments. At the end of the lease, you return the vehicle to the dealer or have options to buy it.
This calculator helps with:
- Payment calculation - Determine monthly lease payments before visiting dealer
- Cost comparison - Compare leasing vs buying the same vehicle
- Term analysis - Evaluate different lease terms and conditions
- Fee impact - Understand how fees and taxes affect total cost
- Negotiation prep - Know what to expect when discussing lease terms
Car Lease Payment Components
Your car lease payment consists of several key components:
Depreciation
The largest portion - covers the vehicle's value loss during your lease term.
Interest (Money Factor)
The financing cost expressed as money factor. Lower is better for you.
Taxes
Sales tax on monthly payment and sometimes on the full vehicle value.
Fees
Acquisition fees, disposition fees, and documentation fees add to total cost.
Types of Car Leases
Closed-End Lease
Most common type. You return the car at lease end with no further obligation (except excess mileage/wear).
Open-End Lease
Common for business. You may owe additional payment if vehicle's value is below residual.
Single-Payment Lease
One large payment at lease beginning instead of monthly payments. Lower effective rate.
How to Use This Car Lease Calculator
Enter Vehicle MSRP
Input the manufacturer's suggested retail price (e.g., $45,000)
Set Negotiated Price
Enter the actual price after dealer negotiation (e.g., $42,000)
Enter Residual Value
Input the percentage of original value at lease end (e.g., 55%)
Set Money Factor
Enter the money factor (interest rate equivalent, e.g., 0.0025)
Choose Lease Term
Select lease duration in months (typically 24-48 months)
Add Down Payment
Include any upfront payment or drive-off fees
Benefits of Car Lease Calculator
- •Accurate Payment Estimates: Calculate exact lease payments before visiting the dealership.
- •Cost Comparison: Compare total lease costs across different vehicles and terms.
- •Negotiation Power: Know the fair market value of lease terms when negotiating with dealers.
- •Lease vs Buy Analysis: Understand the true cost difference between leasing and financing.
- •Budget Planning: Plan your automotive budget with accurate monthly payment expectations.
Factors That Affect Lease Payments
1. Vehicle Price
Higher MSRP means higher depreciation cost and higher lease payments.
2. Residual Value
Higher residual percentage means less depreciation during lease, lowering payments.
3. Money Factor
Lower money factor (interest rate) reduces the finance portion of your payment.
4. Lease Term
Longer terms spread depreciation over more months, reducing monthly payments.
Frequently Asked Questions
Common questions about car leasing and lease payments
How is a car lease payment calculated?
Lease payments are calculated based on the vehicle's depreciation during the lease term plus interest charges. The formula considers the car price, residual value, money factor, and lease term.
What's the difference between leasing and financing?
Leasing is like renting - you make payments for 2-4 years and return the car. Financing is like buying - you make payments for 5-7 years and own the car at the end.
What is a money factor in car leasing?
The money factor is essentially the interest rate for your lease, expressed as a decimal. To convert to an APR equivalent, multiply by 2,400. For example, 0.0025 money factor = 6% APR.
What is residual value in car leasing?
Residual value is the estimated value of the car at the end of the lease. It's set by the leasing company and typically ranges from 45-65% of the original MSRP for most vehicles.
Are lease payments tax deductible?
For business use, lease payments may be tax deductible as a business expense. Personal leases are generally not tax deductible. Consult with a tax professional for your specific situation.
What happens at the end of a car lease?
You have several options: return the car and walk away, purchase the car at the residual value, or lease a new vehicle. You may also have the option to extend the lease.
Can I negotiate lease terms?
Yes, you can negotiate the vehicle's selling price, which affects lease payments. You may also negotiate the money factor and sometimes the residual value with good credit.
What fees are involved in car leasing?
Common fees include acquisition fees ($300-600), disposition fees ($200-400), documentation fees ($50-100), and possible security deposits. Some states also charge sales tax on lease payments.