Free lease payment tool
Car Lease Calculator — Monthly Payment & Lease vs Buy
Calculate your car lease payment from MSRP, residual and money factor — then compare leasing vs buying side by side.
Calculate Your Lease Payment
The real formula dealers use — no hidden markup.
How Car Lease Payments Are Calculated
Lease payment = depreciation fee + finance charge. Depreciation is (capitalized cost − residual) ÷ months. The finance charge is (capitalized cost + residual) × money factor. Dealers quote the money factor because it hides the true APR — always convert it (× 2400).
Lease vs Buy: The Real Tradeoff
- Lease wins: you want a new car every 2–3 years, drive under 12k miles/year, and prefer lower payments with warranty coverage.
- Buy wins: you keep cars 6+ years, drive a lot, or want to build equity and eventually drive payment-free.
Lease Negotiation Checklist
- Negotiate the capitalized cost first — same as negotiating a purchase price.
- Verify the money factor matches your credit tier (ask for the buy rate).
- Check the residual is the bank’s number, not the dealer’s markup.
- Put as little down as possible — a totaled leased car means your down payment is gone.
Frequently Asked Questions
What is a good money factor?
Multiply by 2400 to get the APR. A money factor of 0.00125 equals 3% APR — excellent. Anything above 0.003 (7.2%) is expensive unless your credit is rebuilding.
What is residual value?
The car’s predicted value at lease end, set by the leasing bank as a % of MSRP. Higher residual = lower payments. You can’t negotiate it, but compare it across brands.
Should I put money down on a lease?
As little as possible. Down payments on leases are lost if the car is totaled or stolen — gap insurance covers the bank, not your upfront cash.
Is leasing cheaper than buying?
Monthly payments are lower, but long-term cost is higher — you never build equity. Leasing back-to-back for 6 years typically costs more than buying once and keeping the car.
What happens at lease end?
Return the car (paying any excess wear/mileage fees), buy it at the residual price, or trade it toward a new lease. Check market value first — if it’s worth more than residual, buy it.
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