Car Lease Calculator
Enter the numbers from your lease quote — selling price, money factor, residual, taxes, and fees. This calculator shows your real monthly payment, what's due at signing, and the total cost of the lease, so you can check the dealer's math before you sign.
Quick examples:
The residual value is conventionally a percentage of MSRP, not of the negotiated price
7.50% off MSRP. This is the number to negotiate — a lower selling price lowers the payment even though residual stays MSRP-based
= 6.00% APR
The lease finance rate — ask the dealer for the money factor explicitly
= $22,000.00
What the bank says the car is worth at lease end — set by the lessor, found on the lease worksheet
Your combined state and local rate — we never look rates up
Simplified models — real state rules vary (trade-in credits, taxing of cap cost reductions). Check the actual worksheet
Cash paid at signing that reduces the capitalized cost
Positive equity applied to the deal (not cash out of pocket)
Manufacturer or lease cash applied to the cap cost (not cash out of pocket)
The bank's fee to start the lease. Capitalized = rolled into the cap cost (raises the payment); upfront = paid at signing
Doc, registration, title, and dealer fees paid at signing
Charged by the bank when you return the car at lease end — included in total lease cost
Only powers the cost-per-mile metric — set 0 to hide it
Standard US closed-end lease math: constant payment = depreciation charge + rent charge (+ tax where applicable). First month's payment is due at signing. Trade-in equity and rebates reduce the cap cost but are not counted as cash out of pocket. No mileage-overage, wear-and-tear, or early-termination costs. Results are estimates, not financial advice.
Your Lease Payment
Monthly Lease Payment
Due at Signing
Total Lease Cost
Effective Monthly Cost
Cost per Mile
The 1% rule is a community rule of thumb: a decent lease payment is at or below 1% of MSRP per month. A benchmark, not advice.
Due at Signing
Where Your Money Goes
($23,059.68 over 36 months)Related Calculators
How Lease Math Works
Unlike a loan, a lease has no amortization schedule. You pay for two things: the value the car loses while you drive it (depreciation) and the finance charge the bank collects for tying up its money (the rent charge). Everything starts from the capitalized cost — the lease world's name for the price you are financing.
Net Capitalized Cost
Net cap cost = selling price + capitalized fees − reductions
Start with the negotiated selling price, add any fees you roll into the lease (like the acquisition fee), then subtract your cap cost reductions — down payment, trade-in equity, and rebates. This "adjusted cap cost" is the number the rest of the math runs on, which is why negotiating the selling price is the single most effective lever you have.
Depreciation Charge
Depreciation = (net cap cost − residual) ÷ months
The residual value — set by the bank as a percentage of MSRP, not of your negotiated price — is what the car is predicted to be worth at lease end. You only pay for the slice of value between the net cap cost and the residual, spread evenly over the term. Higher residual, lower payment.
Rent Charge & Money Factor
Rent = (net cap cost + residual) × money factor
The money factor is the lease's interest rate in disguise. Convert it with APR = MF × 2400, so 0.00250 equals 6% APR. The calculator accepts either form, keeps both in sync, and even warns you if the number you typed into the money factor field looks like an APR.
Taxes — Three Methods
Payment = depreciation + rent (+ tax)
Most states tax each monthly payment. Some (like New York and New Jersey) collect tax upfront on the total of all payments, and a few (like Virginia and Texas) tax the full selling price. Pick the method that matches your state, enter your combined rate, and the calculator places the tax in the monthly payment or the due-at-signing figure accordingly.
One counterintuitive point worth understanding: a bigger down payment lowers the monthly payment almost dollar-for-dollar, but it barely lowers the total cost of the lease — you are simply prepaying, minus a small saving in rent charges. That is why this calculator surfaces the total lease cost and the effective monthly cost (everything you pay divided by the term) alongside the advertised-style payment. Trade-in equity and rebates reduce the cap cost too, but they are not cash out of your pocket, so they are excluded from the due-at-signing figure.
Lease Negotiation Tips
Negotiate the Selling Price, Not the Payment
The residual is a fixed percentage of MSRP, so every dollar you knock off the selling price comes straight out of the depreciation you pay. Dealers prefer to talk monthly payments because a payment can be massaged with term length, down payment, and money factor. Agree on the selling price first, then plug it in here and check the payment yourself.
Ask for the Money Factor — and the Buy Rate
The money factor is rarely advertised, and dealers are often allowed to mark up the bank's base "buy rate" and keep the difference. Ask for the money factor explicitly, convert it to an APR (×2400), and ask whether it is the buy rate. If the equivalent APR is far above current auto loan rates for your credit tier, push back.
Keep the Down Payment Small
Money you put down on a lease mostly just prepays the lease — and if the car is totaled or stolen early on, that money is generally gone. Run this calculator with $0 down and with the dealer's suggested down payment and compare the total lease cost: the difference is usually tiny. Judge deals by effective monthly cost, not the advertised payment.
Compare Deals With the 1% Rule and Cost per Mile
Payment as a percentage of MSRP is a fast, brand-agnostic benchmark — at or below 1% is traditionally a strong deal. Cost per mile is even more honest, because it accounts for every fee and your actual mileage allowance. A cheap payment on a 10,000-mile allowance can cost more per mile than a higher payment with 15,000 miles.
Common Use Cases
Checking a Dealer Quote
You have a lease worksheet in hand. Enter the selling price, money factor, residual, fees, and your tax rate, and the calculator reproduces the payment line by line — depreciation, rent charge, and tax — so you can spot exactly where a quote differs from what was promised.
Comparing Two Lease Offers
A $399/month offer with $4,000 due at signing is not automatically better than $459/month with $1,000 down. Run both through the calculator and compare the effective monthly cost and total lease cost — the numbers that spread every fee and drive-off dollar across the full term.
Evaluating an Advertised Special
Manufacturer ads lead with a low payment and bury the due-at-signing figure in the fine print. Recreate the ad here with the disclosed residual and money factor to see the real all-in cost, the payment as a percentage of MSRP, and whether the special actually beats the 1% rule.
Deciding Between Leasing and Buying
Model the lease here, then model the purchase with our Auto Loan Calculator using the same negotiated price. Comparing the lease’s effective monthly cost against the loan payment (and the equity a loan builds) gives you an honest picture of which path fits your budget and driving habits.
What This Calculator Assumes
This is a pure-math tool: you supply every number from your quote, and the calculator applies the standard US lease formulas. Understanding its simplifying assumptions helps you read the results correctly:
- •Standard closed-end US lease: a constant monthly payment equal to the depreciation charge plus the rent charge (plus tax where applicable), with the first month's payment due at signing. One-pay leases, multiple security deposits, and balloon structures are not modeled.
- •You supply every number: the money factor, residual, tax rate, and fees come from your quote or lease worksheet. The calculator never looks up live rates, residuals, incentives, or state tax tables.
- •Residual is a % of MSRP: when you enter the residual as a percentage, it is applied to the MSRP — the industry convention — not to the negotiated selling price.
- •Tax methods are simplified: the three methods (monthly, upfront on total of payments, upfront on selling price) cover the common patterns, but real state rules vary — trade-in credits, taxation of rebates and cap cost reductions, and local surcharges differ. Always confirm against the actual worksheet.
- •Trade-in and rebates are not cash: they reduce the capitalized cost but are excluded from the due-at-signing and total-cost figures, since they are not money out of your pocket (though a trade-in is still an opportunity cost).
- •End-of-lease charges excluded: mileage-overage penalties, excess wear and tear, gap insurance, and early-termination costs are outside the model. The disposition fee is the only end-of-lease charge included, in the total lease cost.
Disclaimer: Results are estimates for planning and comparison, not financial advice. Actual lease terms, taxes, and fees are set by the leasing bank, the dealer, and your state. Review the official lease worksheet and contract before signing.
Frequently Asked Questions
How is a car lease payment calculated?
A lease payment has two parts plus tax. The depreciation charge is the net capitalized cost minus the residual value, divided by the number of months. The rent charge is the net capitalized cost plus the residual value, multiplied by the money factor. In most states, sales tax is then applied to that monthly total. This calculator computes all three parts and shows you each one separately so you can compare them against your dealer worksheet line by line.
What is a money factor and how do I convert it to an APR?
The money factor is how leases express their finance rate — a small decimal like 0.00250 instead of a percentage. Multiply it by 2400 to get the equivalent APR, so 0.00250 equals 6% APR; divide an APR by 2400 to go the other way. This calculator accepts either form and converts live in both directions. Ask the dealer for the money factor explicitly — it is often not printed on the ad, and a marked-up money factor is one of the most common ways a mediocre deal hides.
What is a good money factor?
It depends on your credit and the manufacturer’s current programs, but as a rule of thumb, money factors around 0.00200 (4.8% APR) or below are strong, roughly 0.00250 (6% APR) is average, and anything above about 0.00300 (7.2% APR) is expensive. Banks set a base "buy rate" and dealers are often allowed to mark it up, so it is worth asking whether the quoted factor is the buy rate. Even a small markup adds up: on a typical deal, 0.0004 of markup costs roughly $20–$25 every month.
What is residual value on a lease?
The residual is what the leasing bank predicts the car will be worth at the end of the term, usually expressed as a percentage of MSRP — for example, 55% of a $40,000 MSRP is a $22,000 residual. You only pay for the value the car loses, so a higher residual means lower payments. Residuals are set by the bank and are not negotiable; typical 36-month residuals fall between 45% and 60%, and 65%+ is considered excellent. This calculator accepts the residual as a percentage or a dollar amount.
Should I put money down on a lease?
A down payment (a "capitalized cost reduction") lowers the monthly payment but barely changes the total cost of the lease — it mostly moves money from the monthly column to the drive-off column, minus a small saving in rent charges. There is also a real risk: if the car is totaled or stolen early in the lease, that money is generally gone. Compare the "Total lease cost" and "Effective monthly cost" outputs with different down payments and you will see how little the total moves.
What is the 1% rule in car leasing?
It is a community rule of thumb saying a decent lease payment should be at or below 1% of the car’s MSRP per month — $400 on a $40,000 car. In today’s market that is a stretch for many vehicles, so treat it as a benchmark rather than a pass/fail test: this calculator shows your payment as a percentage of MSRP and rates it from "Excellent" to "High" so you can see instantly where a quote stands. Deals on heavily incentivized models can beat 1%; popular trucks and SUVs rarely do.
What fees come with a car lease?
The main ones are the acquisition fee (charged by the bank to start the lease, typically $595–$1,095, often rolled into the capitalized cost), dealer documentation and government registration fees paid at signing, and a disposition fee (typically $300–$500) charged when you return the car at the end. This calculator lets you pay the acquisition fee upfront or capitalize it, adds the rest to your due-at-signing figure, and includes the disposition fee in the total lease cost so nothing is hidden.
How does sales tax work on a lease?
It depends on your state. Most states tax each monthly payment, so you pay tax only on the portion of the car you use. Some states — New York and New Jersey, for example — collect tax upfront on the total of all payments, and a few, like Virginia and Texas, tax the full selling price of the vehicle. This calculator supports all three methods as simple math; you supply your rate. Real state rules have extra wrinkles (trade-in credits, taxation of rebates), so always confirm against the actual lease worksheet.
What does "due at signing" include?
Typically your first monthly payment, any down payment, upfront fees (documentation, registration, and the acquisition fee if you did not roll it into the lease), and upfront taxes where your state collects them at signing. Advertised specials often bury a large "due at signing" figure under a small monthly payment, which is exactly why this calculator shows both numbers plus an effective monthly cost that spreads everything over the full term.
Can I use this to figure out my lease buyout?
Not directly — the buyout (purchase option) price is set in your contract, usually the residual value plus a purchase-option fee and applicable taxes. This calculator tells you the residual value in dollars, which is the anchor for that decision, but it does not model buyout financing. If you are weighing buying your car at lease end with a loan, run the residual through our Auto Loan Calculator to estimate the financing payment.