Car Lease Payment Calculator
Cap Cost Vehicle price plus any other costs
Cap Cost Reduction Down payment, if any
Trade-In Trade-in credit, if any
Residual Lease-end value
Lease Term Lease length in months
Interest Rate % Money factor times 2400
Tax Rate % Local sales tax rate
See result below
Payment = $ + $     payment  +  tax

Lease Payment Calculator Guide

FOR ACCURACY, THIS CALCULATOR USES THE SAME INDUSTRY-STANDARD LEASE FORMULA THAT DEALERS AND LEASE FINANCE COMPANIES USE



Use this easy car lease calculator to quickly find monthly payment amount and sales tax on each payment (in most states) by entering basic lease parameters.

Cap Cost (Capitalized Cost) is the negotiated price of the vehicle, plus any other costs and fees that will be financed in the lease (not paid up front).

Cap Cost Reduction (Capitalized Cost Reduction) is any cash down payment paid up front, sales tax credit, or rebate, not including first month’s payment, that hasn’t already been deducted from Cap Cost. It serves to reduce monthly payment amount. Do not include official fees, taxes, first month’s payment, or other charges that you’ll pay up front at time of signing.

Trade-In Credit is the credit amount offered for a trade-in vehicle. It acts as a down payment. If you have an outstanding car loan that is being paid off by the dealer as part of the trade deal, enter only the amount of the difference (your equity) between the loan amount and the trade value. However, if your loan amount is more than the trade value, you are “upside down”, and the difference (negative equity)  between loan amount and trade value must be added to your Cap Cost above.

Residual Value is the value of a vehicle at the end of the lease, as set by the lease company. If you only know the Residual Percentage, multiply it by the car’s MSRP (sticker price, not negotiated price) to get Residual Value.

Lease Term is the number of months in a lease. Residual value is affected by the Lease Term.

Interest Rate is the APR finance rate. If you have Money Factor instead, multiply it by 2400 to get APR Interest Rate

Tax Rate should be used here only if your state taxes individual monthly lease payments. Otherwise, leave blank.

Monthly Payment is calculated from the above parameters using the industry-standard lease payment formula.

Sales Tax is only shown if you entered a Tax Rate above. If Sales Tax is charged up front as a lump sum, you probably paid it in cash. However, if you chose to include it in the financed lease cost, you should include that tax amount in your Cap Cost above.

About Calculating Car Lease Payments

A lease calculator is important when leasing a car for a number of reasons. Being able to use it on your phone or tablet right from the dealer’s office gives you power to help control your lease deal as it is taking place.

First, it allows consumers to verify the correctness of a car dealer’s math in a lease offer or lease contract. We are often asked what’s wrong with our calculator when the results don’t match a dealer’s. If the numbers entered into the calculator are exactly the same as the numbers used by a dealer in his calculations, the results will be exactly the same, down to the penny. Our car lease payment calculator uses the same industry-standard lease formula that dealers and lease finance companies use.

Second, a car lease calculator allows consumers to determine how much car they can afford to lease, based on “working backward” with the results. Plug in some values for Cap Cost, with reasonable values for Cap Cost Reduction, Residual Value, and Money Factor, and see if the resulting monthly payment is one that you can afford. If not, go back and reduce Cap Cost as many times as it takes to get the monthly lease payment within your budget.

Third, a lease calculator can help you prepare for visiting a dealer to discuss a possible lease deal. Dealers like to discuss monthly payment, not lease price. Although you can force the discussion to focus on price, you must understand how price is going to affect monthly payment. A car lease calculator helps you do that.  In that sense, it’s a great educational tool as well as a great aid for preparing to lease. Once you understand how the math of a lease works, by using the calculator, you’ll be better prepared to negotiate and handle lease deal discussions.

Finally, being able to manipulate the factors of a lease, such as Money Factor, Residual Percentage, Term, and down payment (Cap Cost Reduction), you can determine the effects of changing lease variables. For example, you can see the significant effect of making a down payment — much more significant than with a car loan. And how choosing to lease a car with a higher Residual Percentage lowers monthly payment. And how having a good credit score creates a lower monthly payment — because you qualify for a lower Money Factor.

If You Don’t Know All the Numbers

If you don’t know all the numbers for the calculator, and are trying to get a rough estimate of your lease payments, you can make some assumptions.

For example, for Cap Cost you can assume that you might get a 5% price discount off of MSRP, then add, say, $1000 for your Lease Acquisition Fee, dealer “doc” fee, and other miscellaneous costs. If you pay sales tax up front in your state and will finance it with your lease, multiply your local sales tax rate by your negotiated vehicle price and add the result here to Cap Cost.

For Trade-In Value, use KBB.com to get an estimate of your car’s trade value. For Residual Value, use a Residual Percentage of 50% (calculate 50% of MSRP) for a 36 month lease.

For Lease Term, the most common term is 36 months. Most manufacturers’ bumper-to-bumper warranties expire in 36 months. For Interest Rate, assuming you have good credit, use the current new-car 36-month loan rate. You can search online for those rates. It’ll vary by lender but you can use an average of the rates you find. If you have poor credit, you should enter a higher rate.

Sales Tax Rate is the local rate that you pay for the purchase of other goods (if any). Use this only if your state taxes each individual monthly lease payment (most do). If your state is one of those that charges full or partial tax up front, then leave this field blank and include the tax amount either in your Cap Cost (if you want to finance it with your lease), or you’ll pay it as part of your up-front cash at time of signing (not entered in the calculator).

Of course, if you know the actual numbers, use those in the calculator instead of the above suggested values. The more realistic the input numbers, the more accurate your calculated monthly payment figure.

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