What This Calculator Estimates
This calculator estimates your monthly car lease payment by combining depreciation (price minus residual value spread over the term) and a finance charge based on the money factor.
Formula / Method Used
Depreciation Fee = (Vehicle Price − Residual Value) ÷ Term. Finance Fee = (Vehicle Price + Residual Value) × Money Factor. Monthly Payment = Depreciation Fee + Finance Fee (before tax).
Worked Example
A $35,000 vehicle with a $19,000 residual value, a 0.00125 money factor, and a 36-month term produces a depreciation fee of about $444 and a finance fee of about $67.50, for an estimated payment of $511.50/month before tax.
How to Interpret the Result
This is your base payment before local lease tax, which some states apply monthly and others apply upfront. Add your tax rate separately for the full picture.
Common Mistakes
- Forgetting to multiply money factor by 2400 to compare it to an APR.
- Ignoring acquisition fees, disposition fees, or excess mileage charges.
- Comparing lease payments to loan payments without adjusting for what you actually own at the end.
- Not confirming whether the quoted price includes negotiated discounts.
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Frequently Asked Questions
What does this lease calculator estimate?
It estimates your monthly car lease payment based on vehicle price, residual value, money factor, and lease term.
What is residual value?
Residual value is the car's estimated worth at the end of the lease, set by the leasing company based on expected depreciation.
What is a money factor?
Money factor is the lease equivalent of an interest rate. Multiply it by 2400 to get an approximate annual percentage rate.
Does this include sales tax?
No, this estimates the base payment before tax. Add your local lease tax rate separately if required in your state.
Why are lease payments lower than loan payments?
Lease payments only cover the vehicle's depreciation plus finance charges over the term, not the full purchase price.
Last updated: July 2026