PocketCalcs

Auto Lease Calculator

Please enter the MSRP.
Please enter the negotiated price.
Please enter a valid down payment.
Please enter the residual value.
Please enter a valid money factor or APR.
Please select a lease term.
Please enter a valid sales tax rate.

Frequently Asked Questions

How is the monthly lease payment calculated?

The monthly lease payment consists of two parts:

  • Depreciation Fee: (Net Cap Cost - Residual Value) / Lease Term
  • Finance Fee: (Net Cap Cost + Residual Value) x Money Factor

The total monthly payment is the sum of these two fees, plus applicable sales tax. The Net Cap Cost is the negotiated price minus any down payment, trade-in value, and rebates.

What is a money factor and how does it relate to APR?

The money factor is a decimal number used to calculate the finance charges on a lease. It's essentially the interest rate expressed in a different format.

  • To convert APR to Money Factor: APR / 2400
  • To convert Money Factor to APR: Money Factor x 2400

For example, a 3% APR equals a money factor of 0.00125 (3 / 2400 = 0.00125). Lower money factors mean lower finance charges.

What is residual value and why does it matter?

Residual value is the estimated worth of the vehicle at the end of the lease term. It's typically expressed as a percentage of MSRP.

  • Higher residual value = Lower monthly payments (less depreciation to pay)
  • Vehicles that hold value well have higher residual percentages
  • Longer lease terms generally have lower residual values

The residual value is set by the leasing company and is not negotiable, but it significantly impacts your monthly payment.

Should I lease or buy a car?

The best choice depends on your personal situation and priorities:

  • Leasing is better if: You want lower monthly payments, prefer driving newer cars every few years, drive less than 12,000-15,000 miles annually, and want warranty coverage throughout
  • Buying is better if: You plan to keep the car long-term, drive high mileage, want to build equity, prefer no mileage restrictions, and want to customize your vehicle

Use the lease vs buy comparison above to see the financial differences for your specific situation.

What fees should I expect when leasing?

Common lease fees include:

  • Acquisition Fee: Charged by the leasing company to set up the lease ($395-$995 typically)
  • Documentation Fee: Dealer paperwork fee ($100-$500 depending on state)
  • Disposition Fee: Charged at lease end if you don't buy or lease another vehicle ($300-$500)
  • Security Deposit: Sometimes required, usually refundable

Some fees can be negotiated or rolled into the monthly payment. Always ask for a complete breakdown of all fees before signing.