Car Lease Calculator

How to use this calculator

1. MSRP and negotiated price. The residual value is normally a percentage of the MSRP (the sticker price), while your payment is based on the price you negotiate, also called the capitalized cost.
2. Down payment and trade-in equity. Both reduce the capitalized cost. Enter the trade-in’s value minus anything you still owe on it.
3. Residual value, as a percentage of MSRP or in dollars. The leasing company sets it.
4. Money factor or APR. Switch to whichever the dealer quoted. The calculator converts between them.
5. Lease term, the acquisition and doc fees, and whether those fees are paid at signing or added to the lease.
6. Sales tax: your rate and how your state taxes leases (see below). If tax is due upfront, choose whether you pay it at signing or add it to the lease.
7. Under Compare with buying, enter a loan rate and term to see the same car bought on a loan.

You get the monthly payment broken into depreciation, rent charge and tax, the amount due at signing, the total lease cost and a lease vs. buy table.

The lease payment formula

The method below follows the Federal Reserve’s consumer guide to vehicle leasing. First, the adjusted capitalized cost is the price plus any fees or taxes added to the lease, minus your down payment and trade-in equity.

The depreciation fee pays for the value the car loses while you drive it:

The rent charge is the lease’s finance charge:

The money factor is an interest rate in disguise: APR = money factor × 2,400. The Federal Reserve guide’s own example uses a money factor of 0.00354, a $18,800 adjusted cap cost and a $12,350 residual, which gives a rent charge of $110.27 a month. Our calculator returns the same figure.

Worked example

You lease a car with a $40,000 MSRP for a negotiated $37,500, with $2,000 down, a 58% residual, a money factor of 0.0025 (6% APR) for 36 months. The $995 acquisition fee and $400 doc fee are added to the lease, and your state charges 7% tax on each payment.

• Adjusted cap cost: $37,500 + $1,395 − $2,000 = $36,895
• Residual: 58% × $40,000 = $23,200
• Depreciation: ($36,895 − $23,200) ÷ 36 = $380.42
• Rent charge: ($36,895 + $23,200) × 0.0025 = $150.24
• Sales tax: 7% × $530.66 = $37.15
• Monthly payment: $567.81

Due at signing is $2,708: the first payment, the $2,000 down payment and $140 of tax on it. Over the lease you pay $22,581 in total, of which $5,409 is rent charge and $1,477 is sales tax.

How states tax leases

The same lease can be taxed in very different ways. The calculator offers three methods:

• Each payment. California taxes the monthly rental payments, and the state’s tax agency treats a capitalized cost reduction as an advance rental payment that is also taxable. This is the calculator’s default; it also taxes your cash down payment at signing.
• Total of payments, upfront. New York taxes all receipts for the whole lease term at the start of a lease of 12 months or more, including the down payment but not the trade-in. New Jersey collects the tax on an accelerated basis on longer leases; under its total-of-lease-payments method, cash down payments, rebates and the acquisition fee are taxable, and a trade-in is credited. Illinois taxes the amount due at signing plus all lease payments on qualifying leases longer than one year, and doesn’t allow a trade-in to reduce that amount.
• Vehicle price. In Texas, the 6.25% motor vehicle tax on a standard lease is paid by the leasing company when it buys the car. The cost is normally built into your lease, so the calculator applies the rate to the negotiated price.

Here’s our example under each method, all at 7%:

Adding upfront tax to the lease lowers what you pay at signing, but you then pay rent charge on the tax. Rules have exceptions for fees, rebates and trade-ins, so check your state’s revenue department before you sign.

How the money factor changes the payment

Same car and terms, different money factors:

A dealer can mark up the money factor above the leasing company’s base rate. Ask for the number and compare it with the APR on a loan offer.

Lease vs. buy

The comparison table puts both options on the same footing over the lease term. For buying, the calculator finances the price plus sales tax and the doc fee, then subtracts the equity you’d have at the end: what the car is worth (assumed to be its residual value) minus what you’d still owe.

In our example, a 60-month loan at 7% costs $762.84 a month. After 36 months you’d have paid $29,462 including the down payment, but you’d own a $23,200 car with $17,038 left on the loan, or $6,162 of equity. That makes the net cost of buying $23,300, about $719 more than the $22,581 lease. At a 5% loan rate, buying comes out about $1,037 cheaper.

Buying wins more clearly the longer you keep the car after the loan is paid off. Leasing suits drivers who want a new car every few years and stay within the mileage limit.

Tips before you sign

• Negotiate the price, not the payment. Every $1,000 off the capitalized cost lowers the depreciation fee and the rent charge.
• Check the mileage allowance. The CFPB notes leases often cap you at 10,000 to 15,000 miles a year, with fees for going over.
• Read the wear-and-tear and early-termination terms. The leasing company usually decides what counts as excessive wear, and ending a lease early can be expensive.
• Keep the down payment small. A big cap cost reduction mostly prepays depreciation.

To check the monthly budget, use the car affordability calculator or the debt-to-income ratio calculator. If you’d rather buy, the auto loan calculator shows the payment with tax and trade-in.

Assumptions and limitations

The calculator models a closed-end lease with level monthly payments. It doesn’t include a security deposit, disposition fee, excess-mileage or wear charges, or taxes on fees beyond what’s described above. Trade-in equity isn’t taxed in the “each payment” and “total of payments” methods. The lease vs. buy comparison assumes the car is worth its residual value at the end of the lease and ignores insurance and maintenance, which you pay either way.

Sources

• Federal Reserve Board, Keys to Vehicle Leasing: More information about the rent charge
• Consumer Financial Protection Bureau, What should I know about the differences between leasing and buying a vehicle?
• California Department of Tax and Fee Administration, Annotation 330.2010: Capitalized Cost Reduction
• New York Codes, Rules and Regulations, 20 NYCRR 527.15: Certain leases of motor vehicles
• New Jersey Division of Taxation, Motor vehicle lease transactions
• Illinois Department of Revenue, Form ST-556-LSE instructions
• Texas Comptroller of Public Accounts, Motor Vehicle Tax Guide: Leases and Motor Vehicle Sales and Use Tax

This calculator gives estimates for general information. Your lease contract and its federal Consumer Leasing Act disclosures show the exact figures.

Updated November 2026. Results are estimates for educational purposes and depend on the inputs you provide.