How the car lease calculator works
Enter the negotiated selling price, residual value, money factor, lease term and any down payment. The payment is a depreciation fee (what the car loses in value over the lease, spread over the months) plus a finance fee (the money factor applied to the car’s value).
The formula
Depreciation fee = (selling price − down payment − residual) / term; finance fee = (selling price − down payment + residual) × money factor; payment = depreciation fee + finance fee. Equivalent APR ≈ money factor × 2,400.
Sales tax, acquisition and disposition fees are not included. How lease tax is charged varies by state.
Frequently asked questions
What is a money factor?
The interest charge on a lease, written as a small decimal. Multiply it by 2,400 to get an approximate APR — 0.00250 is about 6%.
What is the residual value?
What the leasing company expects the car to be worth at the end of the lease. A higher residual means a lower payment.
Does a down payment on a lease make sense?
It lowers the monthly payment, but if the car is written off early the down payment is usually lost. Many people put as little down as possible.
Results are estimates for planning, not financial advice. Last reviewed 2026-09-28.