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Car Lease Calculator
Estimate your monthly lease payment and see how it splits into depreciation, finance charge and tax. Enter the price, residual, money factor and term, then press Calculate.
Written by TopicDrill Editorial Team·Updated June 2026
Monthly payment breakdown
Depreciation$347.22
Finance charge$141.25
Sales tax$34.19
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How the car lease calculator works
A lease payment is built from two charges. The depreciation charge is the gap between the car's price and its residual value, spread evenly across the months of the lease. The finance charge is interest, found by multiplying the sum of the price and residual by the money factor. Sales tax is then applied to that combined amount.
Your down payment and any trade-in lower the capitalized cost, which reduces the depreciation charge. A higher residual percentage also helps, because the car keeps more of its value, leaving less for you to pay during the term.
A quick example
Lease a $40,000 MSRP car negotiated to $37,000, with $2,500 down, a 55% residual, a 6% APR and 36 months. The residual is $22,000 and the capitalized cost is $34,500. Depreciation runs about $347 a month, the finance charge about $141, and with 7% tax the payment lands near $522 a month.
Things to keep in mind
Real leases add acquisition and disposition fees, mileage limits and wear charges, so confirm the full contract before signing. For unbiased guidance on auto financing, see the Consumer Financial Protection Bureau. Compare leasing against buying with our other free calculators.
Frequently asked questions
How is a car lease payment calculated?
A lease payment has two parts. The depreciation charge is the value lost over the term, split monthly, and the finance charge is interest on the car's value. Sales tax is added to that total. This calculator computes all three from your inputs.
What is the money factor?
The money factor is the lease version of an interest rate. To convert an APR to a money factor, divide by 2400. For example, a 6% APR equals a money factor of 0.0025. A lower money factor means a smaller finance charge each month.
What is residual value?
Residual value is what the leasing company expects the car to be worth at the end of the lease, usually a percentage of the MSRP. A higher residual means less depreciation to pay for, which lowers your monthly payment.
Is leasing cheaper than buying?
Leasing often has a lower monthly payment because you only pay for the depreciation during the term, not the whole car. But you own nothing at the end and face mileage limits. Over many years, buying and keeping a car is usually cheaper.
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