Car Lease Calculator
The monthly payment on a car lease, split into what you use up and what you pay to borrow.
Good to know. A lease charges you for the part of the car you use. The residual is the part you hand back.
Not financial advice. Uses only the numbers and rates you enter — no live data.
How it works
In plain words
Spread the value the car loses (price after the down payment, less the residual) over the months, add a finance charge of the price plus the residual times the money factor, and add any sales tax.
The formula
depreciation = (price − down − residual) ÷ months finance = (price − down + residual) × APR ÷ 2400 payment = (depreciation + finance) × (1 + tax)
Worked example
A 35,000 car with 2,000 down, a 55% residual (19,250) and 6% (a money factor of 0.0025) over 36 months: depreciation is 381.94, the finance part 130.63, so the payment is 512.57 a month.
Sources
- Federal Reserve Board, Keys to Vehicle Leasing How a lease payment is built from the depreciation, the rent charge and taxes.
Sources checked October 3, 2026. 3 automated tests check its answers on every change.
About the car lease calculator
A lease payment has two parts. The depreciation part pays for the value the car loses while you drive it: the price after your down payment, less the residual value the leasing company expects at the end, spread over the months. The finance part is the lease’s interest.
Leases quote that interest as a money factor, a small number like 0.0025. Multiply it by 2,400 to get the equivalent APR (here 6%). The finance charge is worked out on the price plus the residual, because you are effectively borrowing both ends of the car’s value.
A high residual is good for the payment: the car is expected to keep more of its value, so you pay for less of it. That is why some models lease much more cheaply than their price suggests.
Watch the extras: mileage limits (often 10,000–12,000 miles a year) with a charge for each mile over, wear-and-tear fees, and the acquisition and disposition fees. A large down payment lowers the payment, but you lose it if the car is written off early.
Whether leasing beats buying depends on how long you keep a car; the lease vs buy calculator compares the two.
Questions people ask
How do I convert a money factor to an APR?
Multiply it by 2,400. A money factor of 0.0025 is 6% APR; 0.00125 is 3%.
What is a good residual value?
Higher is better for you. Three-year residuals of 50–60% are common; it depends on the model and the mileage allowance.
Is it worth putting money down on a lease?
It lowers the payment by the same total, but if the car is stolen or written off, the down payment is usually lost. Many advise keeping it small.