Car Lease Calculator
Enter the MSRP, capitalized cost, cap cost reduction, residual percent, money factor (or APR), term and sales tax to see your monthly lease payment and the total cost of the lease.
Last updated November 4, 2026
Sticker price; the residual is a percent of this.
Negotiated price plus capitalized fees.
Down payment, rebates and trade-in equity.
Money factor such as 0.0025, or an APR such as 6.
Result
$501.12 per month
| Result | Amount |
|---|---|
| Adjusted cap cost | $33,000.00 |
| Residual value | $21,000.00 |
| Depreciation fee | $333.33 |
| Finance (rent) charge | $135.00 |
| Base payment | $468.33 |
| Sales tax | $32.78 |
| Total monthly payment | $501.12 |
| Total lease cost | $20,040.20 |
Total lease cost is the cap cost reduction plus all monthly payments, before acquisition, disposition and other fees. Sales tax rules on leases differ by state.
Show the work
Formula: depreciation = (adjusted cap cost - residual) ÷ term; rent charge = (adjusted cap cost + residual) × money factor; money factor = APR ÷ 2400
- Adjusted cap cost: $35,000.00 - $2,000.00 = $33,000.00.
- Residual value: $35,000.00 × 60% = $21,000.00.
- Money factor 0.00250 (about 6.00% APR).
- Depreciation fee: ($33,000.00 - $21,000.00) ÷ 36 = $333.33.
- Finance charge: ($33,000.00 + $21,000.00) × 0.00250 = $135.00.
- Base payment: $333.33 + $135.00 = $468.33; tax at 7% = $32.78; monthly total $501.12.
- Total lease cost: $2,000.00 + $501.12 × 36 = $20,040.20.
Result: Car lease: $501.12/month for 36 months ($468.33 base + $32.78 tax). Money factor 0.00250 (about 6.00% APR). Total lease cost $20,040.20.
How a car lease payment is calculated
depreciation = (adjusted cap cost - residual) ÷ term
rent charge = (adjusted cap cost + residual) × money factor
payment = depreciation + rent charge + tax
A lease payment pays for the part of the car you use, plus a finance charge. The adjusted cap cost is the capitalized cost minus any cap cost reduction such as a down payment, rebate or trade-in equity. The residual value is what the lessor expects the car to be worth at lease end, usually set as a percent of MSRP.
The depreciation fee spreads the drop in value over the term: adjusted cap cost minus residual, divided by the number of months. The finance charge, also called the rent charge, is the adjusted cap cost plus the residual, multiplied by the money factor. Adding the two gives the base payment.
Sales tax on the base payment is added to get the total monthly payment. Many states tax the monthly payment, but some tax the full price or the cap cost, so confirm the rule on your lease quote. Total lease cost is the cap cost reduction plus every monthly payment.
See how we calculate for the formulas, sources and review schedule behind every calculator.
Money factor and APR
A money factor is a small decimal such as 0.0025 that hides the interest rate. Multiply it by 2,400 to get an approximate APR, so 0.0025 is about 6%. To go the other way, divide the APR by 2,400. The calculator accepts either, so you can paste the rate straight from your quote.
If the dealer quotes only a money factor, convert it before comparing offers. A difference of 0.0005 is roughly 1.2 percentage points of APR.
Residual value
A higher residual lowers the depreciation you pay for, which lowers the payment. The residual is set by the lessor for each model and term and is normally a fixed percentage of MSRP, which is why this calculator asks for MSRP and a residual percent separately from the capitalized cost.
The residual must be below the adjusted cap cost. If it is not, the car would be expected to gain value over the lease and the calculator rejects the entry.
Comparing lease terms
With the residual held fixed, a shorter term spreads the same depreciation over fewer months, so the payment rises. The table below uses the same car at 24, 36 and 48 months. Real lessors usually set a different residual for each term, so use the figures from your own quote.
Edge cases and limits
The cap cost reduction must be less than the capitalized cost, and the residual less than the adjusted cap cost. The term is a whole number of months from 1 to 120, and a money factor above 0.05 is rejected as a likely typo. A zero money factor is allowed.
Acquisition fees, disposition fees, mileage overage charges and insurance are not included unless you add fees to the capitalized cost. Treat the result as an estimate, not a quote.
How to use the Car Lease Calculator
- Enter the MSRP and the capitalized cost from your lease quote.
- Add any cap cost reduction, then the residual value as a percent of MSRP.
- Choose money factor or APR, enter the rate, then the term and sales tax.
- Read the depreciation fee, finance charge, monthly payment and total lease cost.
- Open Show the work to follow each calculation, or use Copy, Print or Share.
Worked example
A $35,000 car with a $35,000 cap cost, $2,000 cap cost reduction, 60% residual ($21,000), money factor 0.0025 (about 6% APR) and 7% sales tax. The adjusted cap cost is $33,000, depreciation over 36 months is $333.33 and the finance charge is $54,000 × 0.0025 = $135.00.
| Term (months) | Base payment | Monthly with 7% tax | Total lease cost |
|---|---|---|---|
| 24 | $635.00 | $679.45 | $18,306.80 |
| 36 | $468.33 | $501.12 | $20,040.20 |
| 48 | $385.00 | $411.95 | $21,773.60 |
Frequently asked questions
How do I convert a money factor to APR?
Multiply the money factor by 2,400. A money factor of 0.0025 equals about 6% APR. To convert the other way, divide the APR by 2,400.
What is cap cost reduction on a lease?
It is anything that lowers the capitalized cost up front, such as a down payment, manufacturer rebate or trade-in equity. A larger reduction lowers your monthly payment.
Is sales tax included in the lease payment?
The result adds your sales tax percent to the base payment each month. Some states tax the full price or cap cost instead, so check your local rules and lease quote.
Why is my dealer quote different from this estimate?
Quotes often include acquisition fees, taxes on fees and other charges that vary by state and lessor. Enter them in the capitalized cost to get closer to the quoted number.