Lease Calculator
Calculate a monthly lease payment from asset value, residual value, lease term and interest rate (converted to money factor).
- Depreciation$437.50 · 76%
- Finance Charge$135.63 · 24%
24% of every lease payment is pure finance charge — money you'd skip entirely by paying cash.
- Depreciation Portion$437.50
- Finance (Rent Charge) Portion$135.63
- Residual Value$19,250.00
Money factor ≈ APR ÷ 2400 = 0.0025
About the Lease Calculator
Car dealers quote lease terms in a "money factor" instead of an interest rate, and that's not an industry accident — a money factor like 0.00250 looks small and harmless, and most shoppers never convert it to the roughly 6% APR it actually represents. This calculator does that conversion for you and breaks the payment into its two real components: a depreciation charge for the value the car loses while you have it, and a finance charge for the privilege of leasing instead of buying outright.
It's for anyone comparing a lease offer against buying, or comparing lease quotes from different dealers, who wants to see the real numbers behind the payment instead of just the bottom-line monthly figure a salesperson quotes.
The negotiated price and terms you're testing don't need to go through a dealer's own payment estimator to get an honest answer — this runs entirely in your browser.
How it’s calculated
The depreciation fee is simply the value the car is expected to lose over the lease — asset value minus residual value — divided evenly across the lease term in months. The finance fee (sometimes called the "rent charge") is the money factor applied to the sum of the asset value and residual value; converting money factor to an approximate APR is done by multiplying it by 2400, which is the reverse of how this calculator derives the money factor from the rate you enter.
Frequently asked questions
What is a money factor and how do I convert it to APR?
A money factor is the lease-industry way of expressing the finance charge, usually shown as a small decimal like 0.00208. Multiply it by 2400 to get the approximate equivalent APR — a 0.00208 money factor is roughly a 5% APR.
Why is a lease payment lower than a loan payment for the same car?
Because a lease only charges you for the portion of the car's value you actually use — the depreciation between the negotiated price and the residual value — plus a finance charge, rather than financing the car's full price the way a purchase loan does.
What is residual value and who decides it?
Residual value is the car's predicted worth at the end of the lease, set by the leasing company (often the manufacturer's captive finance arm) using depreciation models for that specific make and model. A higher residual value generally means a lower monthly payment, since there's less value being depreciated over the lease.
Can I negotiate the money factor or residual value on a lease?
The money factor is often negotiable, especially with strong credit — ask for the "buy rate" money factor before any dealer markup is added. Residual value is typically set by the leasing company's formula and is much harder to negotiate directly.
What happens if I go over the mileage limit on a lease?
You'll typically owe a per-mile overage fee at lease-end, often 15-30 cents per mile depending on the leasing company — factor your realistic annual mileage into the lease terms upfront if you tend to drive more than average.
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