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Car Lease Calculator

Find your monthly car lease payment from the price, residual value, money factor or APR, term and sales tax, with the depreciation and finance fees shown.

Level: Grades 7–8

  • Common Core standard 7.RP.A.3Use proportional relationships to solve multistep ratio and percent problems. Examples: simple interest, tax, markups and markdowns, gratuities and commissions, fees, percent increase and decrease, percent error.
Printable worksheet

Car Lease Calculator

Know the answer you need? Pick an input to work backward.

Inputs

Optional. An acquisition fee or other charges rolled into the lease rather than paid up front.

Trade-in value minus anything still owed on it. 0 if none.

Usually quoted as a percent of MSRP.

Lease rate given as

A small decimal such as 0.00250. Multiply by 2,400 to compare with an APR.

Charged on each monthly payment.

Result

Monthly payment (with tax)

$494.05

Leasing with an adjusted cap cost of $33,650.00 and a residual of $22,040.00 for 36 months costs $494.05 a month including tax.

Depreciation fee
$322.50
Finance fee (rent charge)
$139.23
Base payment (before tax)
$461.73
Monthly sales tax
$32.32
Residual value
$22,040.00What the car is expected to be worth when the lease ends. It's usually your price if you buy the car then.
Adjusted capitalized cost
$33,650.00
Money factor
0.0025
Equivalent APR
6%Money factor × 2,400 (approximate).
Total of monthly payments
$17,785.65
Total lease cost
$20,285.65Monthly payments + down payment + trade-in equity. Excludes fees paid at signing.

See the step-by-step solution ↓

Step-by-step solution

  1. Find the residual, what the car should be worth when the lease ends: the residual percent of the MSRP

    $38,000.00×58%=$22,040.00

  2. Find the amount you're leasing (adjusted cap cost): the price plus added fees, minus your down payment and trade-in

    $35,500.00+$650.00−$2,500.00−$0.00=$33,650.00

  3. Find the depreciation fee: the value you use up, spread evenly over 36 months

    ($33,650.00−$22,040.00)36=$322.50

  4. Find the finance fee (rent charge), the lease's interest: the cap cost plus the residual, times the money factor

    ($33,650.00+$22,040.00)×0.0025=$139.23

  5. Add the two fees to get the payment before tax

    $322.50+$139.23=$461.73

  6. Work out the sales tax on that monthly payment

    $461.73×7%=$32.32

  7. Add the tax to get what you pay each month

    $461.73+$32.32=$494.05

Test yourself

20 quick questions built from this calculator's formula: work out results, predict what happens when an input changes, and work backward from an answer. Every answer comes with the working.

Please note: Results are estimates for planning and comparison. Lenders, banks, and tax authorities may round differently or include fees not modeled here, so confirm figures with your provider before deciding.

What this calculator does

Find out what a car lease will really cost you each month. When you lease, you pay for the part of the car's value you use up during the lease. You also pay a finance charge for using the leasing company's money, plus tax. You don't pay off the whole price as you would with a loan. That's why lease payments are usually lower than loan payments on the same car.

This calculator builds the payment the same way leasing companies do. It starts from the price you negotiated and subtracts your down payment and trade-in. Next it works out what the car should be worth when the lease ends. Then it adds the depreciation fee (for the value you use up), the finance fee and sales tax. Every step is shown, so you can check a dealer's quote line by line.

Where it's used

Why this math matters outside the classroom:

  • Lease payment. A $30,000 capitalized cost, $18,000 residual, 36 months and a 0.0025 money factor give about $333.33 plus $120.00, or $453.33 a month before tax.
  • Money factor to APR. Multiplying a 0.0025 money factor by 2,400 shows it is roughly the same as a 6% interest rate.
  • Negotiating price. Lowering the capitalized cost by $1,000 on a 36-month lease cuts the depreciation part of the payment by about $27.78.
  • Residual value. A higher residual percentage means less of the car's value is used up during the lease, so the payment is lower.

Grade level and standards: Grades 7–8; Common Core State Standards for Mathematics 7.RP.A.3. © Copyright 2010. National Governors Association Center for Best Practices and Council of Chief State School Officers. All rights reserved.

How to use it

  1. Enter the MSRP (sticker price) and the price you negotiated, plus any fees that will be added into the lease.
  2. Enter your down payment and any trade-in equity.
  3. Enter the residual value as a percent of MSRP or in dollars. Then enter the money factor or APR, and the length of the lease in months.
  4. Enter your sales tax rate, then read your monthly payment and what it's made of.

What the inputs mean

MSRP (sticker price)
The manufacturer's suggested retail price, the sticker price. Residual percentages are a percent of this figure, not of the price you negotiated.
Negotiated price (gross capitalized cost)
Also called the gross capitalized cost, or cap cost. You can negotiate it just like a purchase price, and lowering it lowers your payment.
Fees added to the lease
Optional. An acquisition fee or other charges rolled into the lease rather than paid up front.
Down payment (cap cost reduction)
Also called a cap cost reduction. It lowers the payment. But if the car is stolen or totaled early in the lease, you usually don't get that money back.
Trade-in equity
Trade-in value minus anything still owed on it. 0 if none.
Residual value
What the leasing company expects the car to be worth when the lease ends. The lender sets it for each model and lease length. A higher residual means less lost value (depreciation) for you to pay for.
Money factor
The lease's interest rate, written a different way. Multiply it by 2,400 for a rough equivalent APR (yearly interest rate). For example, 0.0025 is about 6%.
Sales tax rate
Many places tax each monthly payment, and that's what this calculator does. Some places tax the full price or the down payment up front instead.

Formula and method

residual = residual% × MSRP ÷ 100
adjusted cap cost = price + fees − down payment − trade-in equity
depreciation fee = (adjusted cap cost − residual) ÷ months
finance fee = (adjusted cap cost + residual) × money factor
money factor = APR ÷ 2400
monthly payment = (depreciation fee + finance fee) × (1 + tax rate ÷ 100)

In the formulas, MSRP is the sticker price and the residual is the car's expected value when the lease ends. The adjusted cap cost is the price plus rolled-in fees, minus your down payment and trade-in. APR is the yearly interest rate, and months is the length of the lease.

The depreciation fee covers the drop in value, from the adjusted cap cost down to the residual. It spreads that drop evenly across the months of the lease. This is the part of the car you use up.

The finance fee is charged on the adjusted cap cost plus the residual. That looks odd, but there's a reason. Multiplying that sum by the money factor is a shortcut for interest on the average amount you owe over the lease. The 2,400 comes from 12 months × 100 percent × 2, and the 2 is what does the averaging.

Worked example

A car has an MSRP of $38,000, and you negotiate $35,500. A $650 acquisition fee (the leasing company's setup charge) is added into the lease, and you put $2,500 down. The residual is 58% for 36 months, the money factor is 0.0025, and sales tax is 7%.

  1. Residual: $38,000 × 58% = $22,040.00.
  2. Adjusted cap cost: $35,500 + $650 − $2,500 = $33,650.00.
  3. Depreciation fee: ($33,650 − $22,040) ÷ 36 = $322.50.
  4. Finance fee: ($33,650 + $22,040) × 0.0025 = $139.23. The base payment is $461.73.
  5. Tax: $461.725 × 7% = $32.32, so the monthly payment is $494.05.

Result: The lease costs $494.05 a month including tax, or $17,785.65 over 36 months on top of the $2,500 down payment.

Understanding the result

The depreciation fee is usually the bigger part. To lower it, negotiate the price down or choose a model with a higher residual. To lower the finance fee, ask for a lower money factor. Dealers can sometimes mark it up above the lender's base rate, so it's worth asking.

Compare the total lease cost with the cost of buying. Include what the car would still be worth to you at the end. A lease often costs less per month, but you have no car at the end.

Assumptions and limitations

  • Sales tax is charged on each monthly payment.
  • Fees added into the lease are added to the cap cost. Fees paid at signing, the first payment and any security deposit aren't included.
  • The money factor and APR are linked by the standard 2,400 conversion.
  • Tax rules for leases vary by location. Some places tax the total price or the down payment up front.
  • Charges for extra miles, wear and tear, and the fee for turning the car in at lease end (disposition fee) aren't included.
  • Dealers may round figures differently along the way, so a quote can differ from this estimate by a few cents.

Frequently asked questions

What is a money factor?

It's the interest rate on a lease, written as a small decimal. Multiply it by 2,400 to get a rough APR. A money factor of 0.00200 is about 4.8%, and 0.00300 is about 7.2%. Lower is better.

Should I put money down on a lease?

A down payment lowers the monthly payment, but it doesn't cut the total much. You save only the finance fee on that amount. If the car is totaled or stolen, gap coverage usually pays the leasing company. It doesn't give your down payment back. That's why many people keep the down payment small.

Why is the finance fee charged on the cap cost plus the residual?

It's a shortcut. Over the lease, what you owe falls from the adjusted cap cost to the residual. So the average balance is about their sum divided by 2. The money factor already has that division by 2 built in. Multiplying the sum by it gives the monthly interest on the average balance.

What is a good residual value?

Higher is better for you, because you pay for less lost value. Residuals depend on the model, the lease length and the mileage allowance. The leasing company sets them, and they aren't negotiable. Typical 36-month residuals often fall somewhere between about 50% and 60% of MSRP.

How this calculator is checked

Method: Standard money-factor lease method: depreciation fee + rent charge on (cap cost + residual), with APR ≈ money factor × 2400. The calculation is covered by automated tests with known reference values and edge cases. Last updated 2026-10-18. Found a problem? Tell us.

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