Enter the vehicle price, residual value, money factor, term, down payment, and sales tax rate to estimate the depreciation fee, rent charge, and total monthly payment.
On this page’s defaults — a $35,000 vehicle, 55% residual, 0.00125 money factor, 36 months, $2,000 down, 6% tax — the monthly payment splits into two genuinely separate charges that most lease conversations blur together:
Base payment: $447.26/mo. Add 6% sales tax and it becomes $474.09/mo — over the 36-month term, $17,067 in total payments on a car whose keys you hand back at the end.
A money factor of 0.00125 looks tiny next to a loan rate, and dealers rely on exactly that impression. Multiply any money factor by 2,400 to convert it to the APR-equivalent rate: 0.00125 × 2,400 = 3.00%. A money factor is simply an interest rate divided by 2,400 — a units change, not a different kind of pricing — and asking a dealer for "the APR equivalent" instead of "the money factor" makes two leases directly comparable to each other and to a loan rate.
The residual is the leasing company's prediction of what the car will be worth at lease-end, and it is normally set by the manufacturer's captive finance arm, not negotiated. A higher residual percentage lowers the depreciation fee, because the gap the lease has to cover shrinks — which is exactly why vehicles with strong predicted resale value tend to lease more cheaply than their purchase price alone would suggest, and why the same car can lease very differently at two dealers quoting different residual assumptions.
This calculator prices what a given lease costs; it does not settle whether leasing beats buying, because that comparison depends on what you do at the end. Buying with the car loan calculator builds equity in an asset you keep; leasing trades that equity for a lower monthly payment and the option to walk away with no resale hassle. Mileage limits, wear-and-tear charges at turn-in, and the fact that leasing has no equity to show for the payments once the term ends are the real costs a payment comparison alone will not surface.
Acquisition fees (often $500–$1,000, sometimes rolled into the cap cost rather than shown separately), disposition fees due at lease-end, and per-mile overage charges for exceeding the contracted mileage are all common and none of them appear in the inputs above. Ask for the full lease worksheet, not just a monthly number, before comparing offers.
A money factor is the lease industry's way of writing the interest rate as a small decimal — like 0.00125 — instead of a percentage. To see the APR-equivalent rate, multiply the money factor by 2400: 0.00125 × 2400 = 3.0% APR-equivalent. Dealers sometimes quote the money factor specifically because a tiny decimal looks less alarming than the percentage it represents, so it's worth running this conversion yourself before signing.
Residual value is the leasing company's estimate of what the vehicle will be worth at the end of the lease, expressed as a percentage of the original price. It's set up front and locked in for the life of the lease — a higher residual percentage means less of the car's value gets paid off during your lease term, which directly lowers the depreciation fee and your monthly payment.
It depends heavily on how long you keep the car and how many miles you drive. Buying with a loan usually costs more per month but builds equity you keep at the end and has no mileage limits; leasing typically has a lower monthly payment but you own nothing when the term ends, and you're on the hook for wear-and-tear or mileage charges. Run the purchase side of the comparison with the Car Loan Calculator to compare total costs directly.
This tool models the two core components of a lease payment — the depreciation fee and the finance fee (rent charge) — but doesn't include the acquisition fee (charged at signing, commonly a few hundred dollars), the disposition fee (charged at lease-end if you don't buy the car), or mileage overage charges if you exceed your contracted annual mileage allowance. These all vary by lessor, so budget for them on top of the base payment shown above.
Worked example: a $35,000 vehicle with a $2,000 down payment, 55% residual value, a 0.00125 money factor, and a 36-month term. Adjusted cap cost = 35,000 − 2,000 = $33,000. Residual value = 35,000 × 0.55 = $19,250. Depreciation fee = (33,000 − 19,250) ÷ 36 = $381.94/month. Finance fee = (33,000 + 19,250) × 0.00125 = $65.31/month. Base monthly payment = 381.94 + 65.31 = $447.26. At a 6% sales tax rate, the monthly payment with tax = 447.26 × 1.06 ≈ $474.09.