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Auto Lease Calculator

Calculate monthly lease payments from MSRP, residual value, and money factor — with a full breakdown of depreciation and lease fees.

Updated: May 2026

How to Use This Calculator

Enter the vehicle MSRP, your negotiated price, down payment, residual value percentage, money factor, lease term, and your local sales tax rate. The calculator instantly shows your estimated monthly payment (pre-tax and after tax), depreciation fee, lease fee, and total cost of the lease — no sign-up required.

Key Lease Terms Explained

Capitalized Cost (Cap Cost)

The capitalized cost is the amount you finance with the lease — your negotiated price minus your down payment. It plays the same role as the loan amount in a purchase: a lower cap cost means lower monthly payments. Negotiating the vehicle price down before discussing lease terms is the most effective way to reduce this number.

Residual Value

Residual value is the estimated worth of the vehicle at the end of the lease, expressed as a percentage of MSRP. It is set by the leasing company, not the dealer. A higher residual value means less depreciation to pay each month, resulting in lower payments. Vehicles that hold their value well — trucks, certain SUVs — typically have stronger residuals and are cheaper to lease.

Money Factor

The money factor is the lease equivalent of an interest rate, expressed as a small decimal (e.g. 0.00125). Multiply it by 2,400 to get the approximate APR. Like APR on a loan, a lower money factor means lower lease fees and a lower monthly payment. Your credit score is the primary driver — strong credit (720+) typically qualifies for the best available money factor.

Depreciation Fee

The depreciation fee is the monthly cost of the vehicle's value lost during the lease. It equals the cap cost minus the residual value, divided by the number of months. This is usually the largest component of a lease payment. Choosing a vehicle with a strong residual value directly lowers this fee.

MSRP

The manufacturer's suggested retail price is the base sticker price before negotiation. Residual values are almost always calculated as a percentage of MSRP, not the negotiated price — so a higher MSRP leads to a higher residual dollar amount, which reduces your depreciation fee. You can find MSRP on the manufacturer's website or resources like Kelley Blue Book and Edmunds.

Down Payment

A down payment (also called a cap cost reduction) lowers your monthly payment by reducing the capitalized cost. However, unlike a loan, you don't recoup a lease down payment if the vehicle is totaled or stolen — your insurer reimburses the lessor, not you. Most experts recommend keeping the down payment low on leased vehicles for this reason.

Understanding Your Results

Monthly Payment Breakdown

Your monthly lease payment has two components: the depreciation fee (cost of vehicle value lost) and the lease fee (cost of financing, similar to interest). Sales tax is applied on top of the pre-tax sum. This calculator shows the full breakdown so you can see exactly what you're paying for each month.

Total Cost of Lease

The total lease cost is the sum of all monthly payments plus your down payment. It represents how much the lease costs you in cash — with nothing to show for it at the end unless you exercise the buyout option. Comparing this figure to the total cost of buying (loan payments + expected resale value) helps determine which option makes more financial sense.

Choosing Your Lease Term

The most common lease terms are 24, 36, and 48 months. A shorter term generally means higher monthly payments but keeps you within the manufacturer warranty, reduces maintenance risk, and lets you upgrade sooner. Longer terms may lower the monthly payment but often come with worse residual values, which can erode the savings. Most lease experts recommend 36 months as the sweet spot.

Lease vs. Buy

Leasing typically offers lower monthly payments and lets you drive a newer vehicle more often, but you build no equity and face mileage limits and wear-and-tear charges. Buying costs more per month but the vehicle is yours at the end. Use our Lease vs. Buy Calculator to compare both paths with your actual numbers.

Frequently Asked Questions

What is a good money factor for a car lease?

A good money factor depends on current market rates. Multiply the money factor by 2,400 to get the equivalent APR — a money factor of 0.00125 equals roughly 3% APR. Compare the converted APR to current auto loan rates; if it's competitive, the money factor is reasonable. Borrowers with credit scores above 720 typically qualify for the best (lowest) money factors offered by manufacturers.

What credit score do I need to lease a car?

Most leasing companies require a credit score of at least 620–660 to approve a lease, but the best money factors are reserved for scores of 720 and above. A lower score doesn't automatically disqualify you, but expect a higher money factor — which raises your monthly payment. Check your credit report before applying and dispute any errors to maximize your score.

Is leasing a car worth it?

Leasing makes sense if you want lower monthly payments, prefer driving a new vehicle every 2–3 years, and drive fewer than 12,000–15,000 miles per year. It may not be worth it if you drive heavily, want to build equity, or prefer to own the vehicle outright. Use the calculator to see the total lease cost, then compare it against our Lease vs. Buy Calculator to make an informed decision.

Can I negotiate a car lease?

Yes — and you should. The negotiated selling price (cap cost) is the most important number to negotiate before discussing lease terms. Dealers often present lease deals focused on monthly payment, which obscures the actual vehicle price. Negotiate the vehicle price first, just as you would for a purchase, then apply the lease terms to that agreed price. You cannot typically negotiate the residual value or money factor — those are set by the manufacturer's finance arm.

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