Lease calculator
Lease calculator
Work out a lease payment from the car's price, residual and money factor, or check what an advertised lease really costs a month.
How a lease payment is worked out
Adjusted cap cost = selling price + fees rolled in − down payment − rebates − trade-in equity
Residual value = MSRP × residual %
Depreciation = (adjusted cap cost − residual value) ÷ months
Rent charge = (adjusted cap cost + residual value) × money factor
Payment = (depreciation + rent charge) × (1 + sales tax)
To compare leases with different money down, spread what is due at signing over the lease: real monthly cost = (due at signing + payment × (months − 1)) ÷ months. Divide that by the MSRP for the share of MSRP a month: under 1% is a great lease.
Want a real offer to start from? We track 38 luxury lease deals from dealers' own websites, each with its real monthly cost, or search them by payment and money down.
Lease calculator questions
How is a lease payment calculated?
It has two parts. Depreciation is the cap cost (the selling price plus any fees rolled in, less money down and rebates) minus the residual value, divided by the months of the lease. The rent charge is the cap cost plus the residual value, times the money factor. Add sales tax where your state taxes lease payments.
What is a money factor?
The lease's interest rate, written as a small decimal. Multiply it by 2,400 to get the APR: a money factor of 0.00125 is about 3%. To turn an APR into a money factor, divide it by 2,400.
What is a residual value?
What the leasing company expects the car to be worth at the end of the lease, as a share of its MSRP. It is set by the leasing company for each model, term and mileage. A higher residual means less depreciation to pay for, so a lower payment.
What is the 1% rule for leases?
A rule of thumb: a lease whose real monthly cost, with the money due at signing spread over the term, is 1% of the car's MSRP or less is a great deal. We rate leases up to 1.25% of MSRP good and up to 1.5% fair.
Should I put money down on a lease?
Usually as little as you can. A down payment only lowers the payments it is spread over, and if the car is stolen or written off early in the lease, the insurance pays the leasing company and the down payment is not refunded.
What is an acquisition fee?
The leasing company's fee for setting up the lease, often about $1,000 on luxury brands. You can pay it at signing or roll it into the cap cost, where it adds to every payment.