Auto Lease Calculator
Free Auto Lease Calculator for financial. Enter your values to compare options, see amortization, and plan smarter.
Formula
Payment = Depreciation + Finance
Depreciation = (Cap cost - Residual) ÷ Term. Finance = (Cap cost + Residual) × Money factor.
Worked Examples
Example 1: Lease Payment Breakdown
Problem:$40,000 MSRP, negotiated to $38,000, 55% residual after 36 months, 0.00125 money factor.
Solution:Residual value: $40,000 × 55% = $22,000\n\nDepreciation portion:\n($38,000 - $22,000) ÷ 36 = $444.44/month\n\nFinance portion:\n($38,000 + $22,000) × 0.00125 = $75.00/month\n\nMonthly payment: $444.44 + $75.00 = $519.44\n\nAPR equivalent: 0.00125 × 2400 = 3.0%\n\nTotal lease cost: $519.44 × 36 = $18,700\n(Plus taxes/fees)
Result:$519/month | 3.0% APR equivalent
Example 2: Comparing Money Factors
Problem:Same $40K lease with $22K residual, 36 months. Compare 0.00125 vs 0.00250 money factor.
Solution:At 0.00125 MF (3% APR):\nFinance charge: $60K × 0.00125 = $75/month\nTotal finance over lease: $2,700\n\nAt 0.00250 MF (6% APR):\nFinance charge: $60K × 0.00250 = $150/month\nTotal finance over lease: $5,400\n\nDifference:\n$75/month more\n$2,700 more over lease term\n\nAlways ask for the money factor and compare to buy rate (best available from manufacturer). Dealers mark up money factor like they mark up car prices.
Result:0.00125 MF saves $2,700 over 0.00250
Example 3: Lease vs Buy Analysis
Problem:$45,000 car. Compare 36-month lease (55% residual, 0.00150 MF) vs 60-month loan at 5%.
Solution:Lease (36 months):\nPayment: $625/month\nTotal cost: $22,500\nOwn nothing at end\n\nBuy (60 months at 5%):\nPayment: $849/month\nTotal cost: $50,940\nOwn car worth ~$20,000\n\nEffective cost of buying:\n$50,940 - $20,000 (car value) = $30,940\n\nLeasing appears cheaper, but:\n- Must keep leasing forever = perpetual payments\n- Buying: after 5 years, no payment\n- Over 10 years: buying wins significantly
Result:Buy wins long-term if you keep cars 5+ years
Frequently Asked Questions
How is a lease payment calculated?
Lease payment = Depreciation + Finance charge. Depreciation = (Negotiated price - Residual value) ÷ Term months. Finance = (Negotiated price + Residual) × Money factor. Unlike loans, you're paying for the car's depreciation during lease term, not its full value.
Should I lease or buy?
Lease if: you want newest car every 2-3 years, drive under 12K miles/year, want lower monthly payment, don't want repair costs. Buy if: you drive a lot, want to own long-term (10+ years), want to customize, want to build equity, or hate the idea of perpetual payments.
Can I negotiate a lease?
Yes! Negotiate: 1) Selling price (capitalized cost) - treat like purchase negotiation. 2) Money factor - know the 'buy rate' from manufacturer. 3) Fees - cap cost reduction, acquisition fee. DON'T focus on monthly payment alone - dealers manipulate terms to hide costs.
What fees are in a lease?
Acquisition fee ($500-1,000) - charged upfront or rolled in. Disposition fee ($300-500) - charged at lease end if you don't buy. Documentation fee (varies). Security deposit (often waived). Registration/taxes. Many are negotiable except government fees.