Lease Calculator
Calculate monthly lease payments for cars and equipment. Compare leasing versus buying costs with money factor to APR conversion and comprehensive cost breakdown.
MSRP or selling price
Optional initial payment
Value of your trade-in vehicle
Length of lease agreement
Money Factor (e.g., 0.00125) = 0.00% APR
Accurate Calculations
Calculate exact monthly lease payments using industry-standard formulas with money factor conversion.
Lease vs Buy Comparison
Compare total costs of leasing versus financing to make informed financial decisions.
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How Lease Payments Work
Lease Payment Formula
Monthly Payment = (Depreciation + Finance Charge) / Lease Term
Where:
- Depreciation = (Net Capitalized Cost - Residual Value) / Lease Term
- Finance Charge = (Net Capitalized Cost + Residual Value) × Money Factor
- Net Capitalized Cost = Vehicle Price - Down Payment - Trade-In
- Residual Value = Vehicle Price × Residual Percentage
- Money Factor = APR ÷ 2400
Example Calculation
Lease a $30,000 car for 36 months with 0.00125 money factor and 60% residual:
- • Net Cap Cost = $30,000
- • Residual Value = $30,000 × 0.60 = $18,000
- • Depreciation = ($30,000 - $18,000) / 36 = $333.33/month
- • Finance Charge = ($30,000 + $18,000) × 0.00125 = $60/month
- • Monthly Payment = $333.33 + $60 = $393.33
- • Money Factor 0.00125 = 3% APR
Understanding Money Factor
The money factor is essentially the interest rate on a lease, but expressed differently. To convert money factor to APR, multiply by 2400. To convert APR to money factor, divide by 2400. For example, a 3% APR equals a money factor of 0.00125 (3 ÷ 2400 = 0.00125).
Frequently Asked Questions
How do you calculate monthly lease payments?
Monthly lease payment = (Depreciation + Finance Charge) / Lease Term. Depreciation is the vehicle price minus residual value, divided by the term. Finance charge is (Vehicle Price + Residual Value) × Money Factor.
What is a money factor in a lease?
A money factor is the interest rate used in a lease, expressed as a small decimal. To convert to APR, multiply the money factor by 2400. For example, a money factor of 0.00125 equals a 3% APR.
What is residual value?
Residual value is the estimated worth of the vehicle at the end of the lease term, expressed as a percentage of the original price. Typical residual values range from 50-60% for a 3-year lease. Higher residual values result in lower monthly payments.
Should I lease or buy a car?
Leasing typically has lower monthly payments but you don't own the vehicle. Buying costs more monthly but builds equity. Our calculator compares total costs to help you decide based on your financial situation and how long you plan to keep the vehicle.
How does down payment affect my lease?
A down payment reduces the capitalized cost (amount being financed), which lowers your monthly payment and total interest paid. However, unlike buying, you won't get this money back at the end of the lease, so many experts recommend minimal down payments on leases.
Can I use this for equipment leases?
Yes! This calculator works for any lease - cars, trucks, equipment, or machinery. Just enter the equipment price, lease terms, and the money factor or APR provided by the lessor. The same formula applies to all types of leases.