Car Lease Calculator
Enter the vehicle MSRP, residual value, money factor, and lease term to calculate your exact monthly lease payment and total cost.
Results · 36-Month Lease
Monthly Payment
$475.30
Residual Value
$19,250
Equivalent APR
3.00%
Monthly Depreciation
$379.03
Monthly Finance Charge
$65.18
Total Lease Payments
$17,111
Total Lease Cost
$20,111
How Car Lease Payments Are Calculated
A car lease payment has two components: a depreciation fee and a finance charge. The depreciation fee covers the portion of the vehicle's value you use during the lease. For example, if you lease a $35,000 car with a 55% residual value over 36 months, the car is expected to be worth $19,250 at lease end — meaning you're paying for $15,750 in depreciation spread over 36 months, or about $438/month.
The finance charge is based on the money factor — a small decimal (like 0.00125) that dealers use instead of an interest rate. To convert a money factor to an approximate APR, multiply by 2,400. So a money factor of 0.00125 equals roughly 3% APR. The finance charge is calculated on the sum of the adjusted cap cost and residual value: a higher residual value actually increases your finance charge, which surprises many lessees.
The residual value percentageis set by the automaker's captive finance arm (not the dealer) and varies by vehicle, trim, and lease term. Vehicles with strong resale value — like Toyota RAV4s, Honda CR-Vs, and many Subaru models — command higher residuals (58–65% over 36 months), which dramatically lowers your monthly payment. Luxury vehicles and electric cars often have lower residuals (45–55%), making them more expensive to lease on a per-dollar basis.
Unlike buying, the down payment on a lease (called a cap cost reduction) does not reduce your interest expense — it only reduces the monthly payment. If the car is stolen or totaled, you lose that money. Many financial advisors recommend keeping the down payment low on a lease and instead using that cash elsewhere.
Frequently Asked Questions
What is a good money factor for a car lease?
A money factor of 0.00100 to 0.00150 (equivalent to 2.4%–3.6% APR) is generally considered competitive for lessees with excellent credit (720+ FICO) in 2026. Multiply any money factor by 2,400 to get the approximate APR. Always check the current money factor against online resources before signing — dealers sometimes mark it up without disclosure. You can negotiate the money factor just like an interest rate on a loan.
Is leasing or buying a car better financially?
Leasing has lower monthly payments and you always drive a newer car under warranty, but you build no equity. Buying costs more per month initially but you own the asset and pay nothing once the loan is paid off. Leasing makes the most financial sense if you consistently want a new car every 2–3 years, drive under 12,000–15,000 miles per year, and don't want to deal with long-term maintenance. If you keep cars for 7+ years, buying is almost always cheaper over the full period.
What does the acquisition fee cover?
The acquisition fee (also called a bank fee or origination fee) is charged by the financial institution that funds the lease — not the dealer. It typically ranges from $600 to $1,100 and covers administrative costs of setting up the lease. It can be paid upfront or rolled into the cap cost (which slightly raises your monthly payment). Unlike some loan fees, it's rarely negotiable.
What happens if I go over my mileage limit?
Most leases include 10,000, 12,000, or 15,000 miles per year. Excess miles are charged at $0.15–$0.30 per mile at lease end. On a 36-month lease with a 12,000-mile allowance, going 5,000 miles over at $0.25/mile costs $1,250 at turn-in. If you know you'll exceed the limit, buy extra miles upfront — dealers charge $0.08–$0.15 per mile for pre-purchased miles, significantly cheaper than the end-of-lease rate.