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Estimate your monthly
car payment.
Calculate your monthly car lease payments instantly. Input MSRP, residual value, and money factor to see your total cost, the depreciation versus finance split, and the rent charge over the term, all in one professional showroom-style spec sheet.
Build sheet
Configure the lease
Vehicle
Cap-cost reductions
Term
Rate
Monthly lease payment
36-month term
Spec sheet
Lease components
- MSRP (sticker price)$42,500
- Negotiated price$39,900
- − Down payment$2,500
- − Trade-in$0
- = Adjusted cap cost$37,400
- Residual value (58% of MSRP)$24,650
- Money factor / APR0.00125 · 3%
- Depreciation over term$12,750
Pre-tax. Excludes acquisition fees, disposition fees, sales tax, and dealer add-ons. State sales-tax treatment varies — some states tax monthly payments, some tax the full cap cost.
Monthly payment · 36 mo
$431.73/mo
Total cost
$18,042
Interest
$2,792
Field guide
How an auto lease actually works.
A lease is not a purchase with a smaller monthly. You're essentially renting the depreciation of the vehicle — the difference between what it's worth when you drive it off the lot and what it's projected to be worth when you hand it back. On top of that, the leasing company charges interest on the money tied up in the deal. That's it. Two numbers.
The formula
- capCost: adjusted capitalized cost (negotiated price minus down payment minus trade-in)
- residual: projected end-of-lease value (set as a percentage of MSRP)
- term: number of months in the lease
- MF: money factor (interest as a tiny decimal; see below)
The first half is the depreciation portion: total dollars lost to depreciation, divided evenly across the term. The second half is the finance portion (sometimes called "rent charge"): interest on the average outstanding balance, which is roughly the average of cap cost and residual.
What the calculator excludes
For clarity, this tool stays pre-tax and provider-agnostic. Real-world leases also include:
- Acquisition fee: typically $595–$995, often rolled into the cap cost
- Disposition fee: typically $300–$500, charged at lease-end if you don't buy or re-lease
- Sales tax: varies by state. Some tax the monthly payment; others tax the full cap cost upfront
- Mileage cap: typically 10k–15k mi/yr. Overages run $0.15–$0.30/mi
Plain-English guide · 01
What is money factor?
Money factor (MF) is the lease industry's way of expressing the interest rate. It looks like a tiny decimal — something like 0.00125 — but it's just an APR in disguise. Lessors quote it this way mostly for historical reasons; it makes the rent-charge math (a single multiplication) trivially easy at the dealer's desk.
The conversion
APR = MF × 2400
MF = APR ÷ 2400
The 2400 comes from compounding monthly (12 months) and a factor-of-2 simplification baked into the lease formula.
How to read MF quotes
| Money factor | ≈ APR | Tier |
|---|---|---|
| 0.00050 | 1.20% | Subvented |
| 0.00100 | 2.40% | Top-tier |
| 0.00150 | 3.60% | Tier 1 |
| 0.00250 | 6.00% | Tier 2 |
| 0.00400 | 9.60% | Sub-prime |
Negotiation tips
- • Ask for the buy rate, not the sell rate. Dealers can mark MF up by up to 0.0004 (≈ 1% APR) — that's pure profit added to your monthly.
- • Always cross-check: if the dealer quotes APR, divide by 2400. If they quote MF, multiply by 2400. The two should agree.
- • Manufacturer "subvented" leases (e.g., promotional offers from BMW Financial, Lexus Financial) can have MFs of 0.00001–0.00050, effectively free interest, used to move slow inventory.
Plain-English guide · 02
How is residual value determined?
Residual value is the leasing company's educated guess at what the car will be worth at lease-end, expressed as a percentage of MSRP. It's set before you sign; you can't negotiate it and it's the single biggest lever in your monthly payment. A 5-point swing on residual (say 58% vs 63%) on a $42k MSRP changes the depreciation slice by ~$2,100, or roughly $58/mo on a 36-month lease.
Who sets it
Residuals are published monthly by ALG (Automotive Lease Guide), now part of J.D. Power. Captive lenders — BMW Financial, Toyota Financial, Lexus Financial, and others, generally use ALG as their baseline and may adjust ±2% based on their own desk strategy. Independent banks tend to follow ALG more strictly.
What drives the number
- Brand reputation for resale. Toyota, Honda, Lexus, Porsche, and Subaru tend to lead — high residuals (60–70% at 36 mo). Marques with poor depreciation history (Maserati, Alfa Romeo, Cadillac, lower-trim domestics) sit lower (45–55%).
- Term. Shorter terms = higher residual (less time to depreciate). 24 mo lease often residuals 5–10pp higher than 36 mo.
- Mileage allowance. Higher mileage caps (15k/yr vs 10k/yr) lower the residual ~2pp because the vehicle hits the wholesale market with more miles on it.
- Trim and options. High-option packages residual poorly — the upgrade premium evaporates fast in the used market.
- Market cycle. During used-vehicle shortages (2021–22), residuals rose dramatically; in normal markets they drift down.
Why high residual = low monthly
You only pay for what you use. A high residual means the leasing company believes the car will hold most of its value, so the depreciation slice you're renting is small — and your monthly drops accordingly. This is why luxury brands with strong resale (Porsche, Lexus) often have surprisingly affordable lease payments despite high MSRPs.
Disclaimer. Estimates only. Actual lease offers depend on credit tier, regional sales-tax treatment, manufacturer incentives, and dealer-specific fees. Always have the dealer provide the full lease worksheet and verify the money factor as the buy rate before signing.