Car Lease Calculator

How car leasing works

A lease is a long-term rental. You pay for the part of the car's value you use up during the term — its depreciation — plus a finance charge, and at the end you return the vehicle. You never own it unless you separately buy it out at its residual value. This is the single most important thing to understand before signing, because leasing and buying look similar on a monthly statement but leave you in completely different places when the term ends.

The car lease calculator above models exactly that. Enter the price, term, money factor, and residual, and it computes your monthly payment the way a dealer's worksheet does. It works as an auto lease calculator, a vehicle lease calculator, and an automobile lease calculator alike — the labels differ, the math doesn't. Used as a quick lease calculator or lease payment calculator it gives you a number in seconds; treat it as a car lease estimator, an auto lease estimator, or a vehicle lease estimator when you want a ballpark before you ever reach the dealership.

Lease vs buy: which is right for you

The car lease vs buy decision comes down to what happens at the end of the term. Leasing usually means a lower monthly payment and a new car every few years, but you have nothing to show for it afterward and mileage limits apply. Buying costs more per month but builds equity — you keep the car and whatever it's worth later. That trade-off, not the monthly payment alone, is the heart of the lease or buy a car question.

This page shows both sides so you can judge for yourself, with no recommendation either way. The Lease vs Buy panel puts the total lease outlay next to the net cost of buying (price plus tax, minus the car's residual value as an estimate of resale). However you phrase it — leasing a car vs buying a car, auto leasing vs buying, vehicle leasing vs buying, car lease vs purchase, the auto buy or lease choice, or simply the lease v buy car comparison — the numbers here let you weigh the two on equal footing.

The comparison assumes a cash purchase; financing the purchase would add loan interest and change the result.

How to calculate a lease payment

A monthly lease payment is the sum of three parts: depreciation, a finance charge, and sales tax. The formulas are:

The "adjusted price" is the vehicle price minus any down payment (cap cost reduction). Depreciation covers the value the car loses while you drive it; the finance charge is the cost of the money tied up in both the car and its residual. Add them, apply tax, and you have the payment. The total lease cost is that monthly payment across every month of the term plus any down payment — exactly what the calculator reports.

Money factor explained (and how to convert it to APR)

The money factor is the lease world's version of an interest rate. It's quoted as a small decimal like 0.00250, and you convert the money factor to interest rate form with a single step:

So a money factor of 0.00250 equals a 6% APR. Because dealers quote the money factor while most people think in APR, the calculator shows both numbers no matter which you enter — making it a money factor calculator and a lease interest rate calculator at the same time. If you only need the conversion, type either value and read off its twin; that's all a money factor to interest rate lookup really is.

What is residual value

Residual value is the car's predicted market value at the end of the lease — not a remaining loan balance. The dealer sets it in the contract, usually as a percentage of MSRP, and for popular models on a 36-month lease it often lands somewhere around 45–60%. A higher residual means the car holds its value better, so there's less depreciation to pay for and a lower monthly payment.

Enter the residual as a percentage or a dollar amount and this tool works as a residual value calculator and a lease residual value calculator, feeding that figure straight into the depreciation formula. The residual also drives the Lease vs Buy panel, where it stands in for the car's resale value if you bought instead. At lease end you can usually purchase the car for that residual amount — a separate transaction from the lease itself.

Related calculators

If you'd rather finance the car and own it, the car loan calculator estimates a monthly loan payment with down payment, trade-in, and sales tax. Compare its payment with the lease payment here to see the lease v buy car picture in full.