Car Lease Calculator
Estimate a car lease payment from MSRP, negotiated price, residual value and money factor or APR, including sales tax and the amount due at signing.
Written by Rahman · Last reviewed
Quick answer
A $35,000 car leased at a $33,000 negotiated price, with $2,000 down, a 55% residual and 4.8% APR over 36 months, costs $326.39 a month in depreciation plus $100.50 in rent charge: $426.89 before tax, or $456.77 with 7% sales tax. Every lease payment is those two charges: depreciation is the value you use up, and the rent charge is interest on the money tied up in the car. Money factor × 2400 converts to the equivalent APR.
Sales tax here is estimated on the monthly payment, the most common convention — but several states tax the full negotiated price or the cap cost reduction differently. Confirm how your state taxes a lease before relying on this figure. Due-at-signing assumes the down payment, fees and first month's payment are collected upfront, which is common but not universal.
Results are estimates for general guidance and are not financial, tax or legal advice. Except where a calculator names a currency, figures carry no currency of their own: put in pounds and you get pounds back, put in rupees and you get rupees. Figures depend on the assumptions you enter and on rates that change over time. Check current rates and speak to a qualified adviser before acting on them.
About the Car Lease Calculator
Leasing a car means paying for the vehicle's depreciation over the lease term plus a finance charge, rather than financing its full price the way a car loan does. Two figures set the depreciation: the negotiated price (after any down payment or cap cost reduction) and the residual value, what the leasing company expects the car to be worth when the lease ends.
This calculator splits the estimated monthly payment into its two components (the depreciation charge and the rent charge), the same breakdown a lease disclosure statement shows, then adds sales tax and estimates the total due at signing.
Depreciation charge = (Negotiated price − down payment − residual value) ÷ term. Rent charge = (net cap cost + residual value) × money factor. Base payment = depreciation + rent charge.
Money factor is quoted as a small decimal (e.g. 0.00200); multiplying it by 2400 converts it to the equivalent APR (e.g. 0.00200 × 2400 = 4.8%). This calculator accepts either and derives the other.
Why the same monthly payment can hide very different deals
Because the payment is built from price, residual value and money factor together, the same monthly number can come from a low price with an aggressive (low) residual, or a high price propped up by an optimistic (high) residual estimate set by the leasing company, not you. A higher assumed residual lowers the payment today but has no bearing on what the car is actually worth later: it only matters if you plan to buy it at lease-end, where a residual set too high works against you and one set too low works in your favor.
This is why negotiating only the monthly payment, the same trap that affects car loans, is the wrong move for a lease too: settle the negotiated price first, on its own, before the residual and money factor are ever discussed.
- The money factor is often negotiable, especially with strong credit, so ask for it directly rather than only the payment.
- A dealer can quote a marked-up money factor without changing the headline payment much, by adjusting the residual or the price to compensate.
- Confirm the residual value in writing if there is any chance you will want to buy the car at the end of the lease.
Sales tax on a lease is not one national rule
Unlike the depreciation and rent-charge formulas, which are universal, how sales tax applies to a lease genuinely varies by state: many tax only each monthly payment as it's paid (what this calculator assumes by default), while some states tax the full negotiated price up front as if it were a purchase, and treatment of a cap cost reduction or trade-in credit varies further still. There is no single correct number here the way there is for the finance math.
Frequently Asked Questions
What is a money factor and how is it different from APR?
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Money factor is a lease-specific way of expressing the finance charge, given as a small decimal like 0.00200 rather than a percentage. Multiplying it by 2400 converts it into the equivalent APR (0.00200 × 2400 = 4.8%), which makes it easier to compare a lease offer against loan financing.
What is residual value?
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It is the leasing company's estimate of what the car will be worth at the end of the lease term, and it is set by the lessor, not negotiated the way price usually is. A higher residual lowers your monthly payment but also means you're financing less of the car's depreciation upfront.
Does this include sales tax correctly for my state?
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Only as a common default. This calculator estimates tax on the monthly payment, which many states use, but some tax the full negotiated price upfront or handle a cap cost reduction differently. Confirm the treatment in your state before relying on the total.
What is due at signing?
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This is an estimate combining your down payment, the fees you entered and the first month's payment, the most common structure, though some deals bundle in additional items (like a security deposit) or advertise a lower “drive-off” amount by rolling costs elsewhere.
Sources
- CFPB — What should I know about leasing versus buying a car? — US regulator explaining residual value, the money factor / rent charge, and how the monthly lease payment is built up.