Enter your car price, down payment, residual value, money factor, and lease term to calculate your monthly car lease payment. You'll also see a breakdown of the depreciation fee, finance fee, and total lease cost so you can compare deals with confidence.
Monthly Lease Payment
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Monthly Depreciation Fee
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Monthly Finance Fee
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Total Lease Cost
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Total Depreciation
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Total Finance Charges
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Leasing is typically better if you prefer lower monthly payments, like driving a new car every few years, and don't drive excessive miles. Buying makes more sense if you plan to keep the vehicle long-term, want to build equity, or drive more than the mileage limits allow. The right choice depends on your budget, lifestyle, and how much you value ownership.
A lease payment has two main components: a depreciation fee and a finance fee. The depreciation fee covers the vehicle's loss in value over the lease term (net cap cost minus residual value, divided by months). The finance fee is calculated by multiplying the sum of the net cap cost and residual value by the money factor. Sales tax is then applied to the total monthly payment.
The money factor is essentially the interest rate on a lease, expressed as a very small decimal (e.g., 0.00125). To convert a money factor to an approximate APR, multiply it by 2,400. A lower money factor means you're paying less in financing charges each month. Dealers may mark up the money factor, so it's worth negotiating or checking the published base rate from the manufacturer.
Residual value is the projected worth of the leased car at the end of the lease term, set by the leasing company as a percentage of MSRP. A higher residual value means you're financing less depreciation, which lowers your monthly payment. Vehicles that hold their value well — like many luxury or Japanese brands — often have better lease deals as a result.
Leasing offers lower monthly payments and lets you drive a newer vehicle more often, but you don't build any equity. Buying costs more per month but you own the car outright once paid off, giving you an asset you can sell or trade. If you consistently need the latest features and a warranty, leasing can be more economical. If you plan to keep the car for 7+ years, buying usually wins financially.
Residual value is set by the leasing company — typically expressed as a percentage of the MSRP. For example, a car with a 55% residual on a 36-month lease with a $35,000 MSRP would have a residual value of $19,250. You don't calculate this yourself; the manufacturer or bank publishes it monthly. Higher-residual vehicles are generally better lease deals.
A good money factor depends on current interest rates and your credit score. As a rule of thumb, multiply the money factor by 2,400 — if the result is competitive with new car loan rates (e.g., under 5–7% APR), it's reasonable. Always compare the equivalent APR and check manufacturer-subsidized lease programs, which often offer below-market money factors.
Common lease fees include an acquisition fee (charged by the bank to originate the lease, typically $595–$1,000), a disposition fee at lease end, documentation fees, and registration costs. You may also face excess mileage charges if you exceed the agreed mileage limit. Understanding all fees upfront helps you accurately compare the true cost of different lease offers.