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Total Monthly Payment (w/ Tax)
Monthly Depreciation
Monthly Finance Fee
Monthly Tax
Total Cost of Lease
Calculation Principles & Formulas
Car lease payments consist of two main parts: depreciation (the value the car loses during the lease) and the finance fee (interest), plus applicable sales tax.
[Monthly Payment Calculation]
1. Net Capitalized Cost = Negotiated Price - Down Payment - Trade-in
2. Residual Value = Value of the car at the end of the lease
3. Depreciation Fee = (Net Cap Cost - Residual Value) ÷ Lease Term
4. Finance Fee = (Net Cap Cost + Residual Value) × Money Factor
* Money Factor = Interest Rate (%) ÷ 2400
5. Monthly Tax = (Depreciation Fee + Finance Fee) × Tax Rate
6. Total Monthly Payment = Depreciation Fee + Finance Fee + Monthly Tax
Note: The "Money Factor" is a way of expressing the interest rate in a lease. It is calculated by dividing the annual interest rate by 2400.
How to Use
- Enter the Negotiated Price of the vehicle.
- Enter your Down Payment and Trade-In Value.
- Input the estimated Residual Value at the end of the lease.
- Set the Lease Term (months) and Interest Rate (APR).
- Click 'Calculate Lease' to see the detailed monthly payment breakdown.
Tips & FAQ
- Residual Value is usually set by the leasing company; a higher residual value means lower monthly payments.
- Money Factor is a way of expressing the interest rate, typically calculated as APR divided by 2400.
- Don't forget to factor in insurance, maintenance, and excess mileage fees.
