Estimate your monthly car lease payment, including depreciation, finance charge, and sales tax.
Rates as of Q2 2025 (example)
An auto lease calculator estimates your monthly car lease payment based on the vehicle's price, your down payment (called a "cap cost reduction" in leasing terms), the residual value at lease end, the lease term, the money factor (an interest-like rate), and sales tax. It breaks the payment down into depreciation, finance charge, and tax — the three components of every lease payment.
The depreciation portion is the difference between the adjusted capitalized cost (vehicle price minus down payment) and the residual value, divided by the lease term in months. The finance charge is calculated using a "money factor" — this calculator converts your entered APR to a money factor by dividing by 24, then multiplies it by the sum of the adjusted cap cost and residual value. Sales tax is then applied to the combined depreciation and finance charge (in states that tax lease payments this way).
Example: For a $35,000 vehicle with a $2,000 down payment, a 55% residual value, a 36-month term, a 5% APR/money factor rate (example rate — enter your offered rate), and 7% sales tax, the monthly depreciation, finance charge, and tax combine into an estimated total monthly lease payment. (Note: all figures in this example are for illustration purposes only and do not represent actual rates or lease terms.)
Unlike buying, leasing means you're essentially paying for the vehicle's depreciation over the lease term plus a finance charge, rather than paying off the full price. Residual values, money factors, and any incentives or rebates are set by the leasing company (often the manufacturer's captive finance arm) and can vary significantly between offers for the same vehicle — the figures used as defaults here are examples only (example rate used in this calculator — actual lease terms vary by leasing company and current promotions). How sales tax is applied to leases also varies by state — some tax the full vehicle price upfront, while others tax only the monthly payment.
A money factor is the interest rate used in lease calculations, expressed as a small decimal rather than a percentage. This calculator converts your entered APR to a money factor by dividing by 24, a common approximation.
Residual value is the leasing company's estimate of the vehicle's worth at the end of the lease term, expressed as a percentage of MSRP. It's set by the leasing company (often the manufacturer's finance arm) and significantly affects your monthly payment.
No — the default rate is an example only. Lease rates and money factors vary by leasing company, your credit profile, and current manufacturer incentives, so always use the rate from an actual lease offer.
On a lease, a down payment (called a "cap cost reduction") reduces the amount being depreciated over the lease term, which lowers your monthly payment — but unlike a loan, you don't build equity in the vehicle, so a large down payment carries more risk if the car is totaled or stolen.
Sales tax rules for leases vary by state. Some states tax the full vehicle price upfront like a purchase, while others tax only the monthly lease payment. This calculator applies tax to the monthly depreciation and finance charge as a general estimate.
Leasing often has a lower monthly payment than financing a purchase, since you're only paying for depreciation during the lease term rather than the full vehicle price. However, you don't build equity or own the car at the end unless you exercise a purchase option, so the better choice depends on your priorities.
Disclaimer: The information, rates, and figures provided on this page are for educational and illustrative purposes only. All rates and examples shown are sample values and do not reflect current or actual lease terms, money factors, or market rates. Financial rules and regulations change frequently. Always consult a qualified financial advisor or dealership before making any financial decisions.