You enter the vehicle price, down payment, residual value (as a percentage of MSRP), money factor, lease term, and sales tax rate. The tool subtracts the down payment to get the capitalized cost, computes monthly depreciation as the difference between cap cost and residual divided by the term, adds a monthly rent charge based on the money factor, then applies sales tax. The equivalent APR is simply the money factor multiplied by 2,400. Acquisition fees, disposition fees, and mileage penalties are not included.
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. Dealers don't always volunteer it — ask directly, or calculate it from the monthly payment breakdown on your lease worksheet.
The residual is set by the leasing company, not the dealer, and is typically 50–65% of MSRP for a 36-month lease. Ask for the residual percentage on the specific trim and term you're considering. A higher residual means lower monthly payments.
Leasing typically has lower monthly payments because you're only paying for depreciation, not the full vehicle price. However, you build no equity and face mileage and wear restrictions. Over multiple lease cycles, leasing generally costs more than buying and holding a car long-term.
Yes. The cap cost (vehicle price), money factor, and sometimes the residual are all negotiable. Lowering the cap cost or money factor directly reduces your monthly payment. Always negotiate the price before mentioning you plan to lease.
This calculator omits acquisition fees (typically $595–$1,095), disposition fees ($300–$500 at lease end), excess mileage charges, and wear-and-tear penalties. Factor these into your total cost comparison when deciding between leasing and financing.
Estimate only. Results reflect your inputs and standard formulas. Double-check important decisions independently.