Auto Lease Calculator — Calculate Lease Costs
Monthly car lease payment from capitalized cost, residual value, and money factor.
The building blocks of a lease payment
Think of a lease as a long-term rental (typically 2–4 years). Your monthly payment has two parts: the depreciation (the car's loss in value over the lease, spread across the term) and the finance charge (interest on the average amount financed).
- Capitalized cost — the negotiated price of the car. Negotiate it down just as you would when buying; many experts suggest negotiating the price first, then revealing you intend to lease.
- Residual value — the car's estimated worth at lease end, set by the financial institution (not the dealer). Cars that hold value well cost less to lease.
- Money factor — the lease interest rate in disguise. Convert an APR to a money factor by dividing by 2,400. A higher money factor means a pricier lease, and it rises with worse credit.
- Lease term — length of the lease, usually 24–48 months.
Mileage limits
Most U.S. leases cap 10,000–15,000 miles per year (12,000 is common). Exceeding the cap typically costs 5–20 cents per extra mile. "High mileage" leases raise the cap for a higher monthly payment, and you can avoid over-mileage penalties by buying the car at lease end.
Wear and tear
Leased cars are inspected on return. Normal wear (minor dings under ½″, small interior stains, routine tire/brake replacement) is not charged. Excessive wear (broken parts, body damage over 2″, non-functioning components) is your responsibility. Detailing the car and fixing small items before return can help avoid charges.
Why lease?
- Lower down payment and monthly cost than buying new.
- U.S. leases can be written off as a business expense.
- Most leases stay under factory warranty, limiting repair bills.
- Drive a new car every few years without resale hassle.
Trade-offs: you build no equity, face mileage and modification limits, and may owe wear-and-tear charges at turn-in.