Lease Payment Calculator
Calculate monthly lease payments for a car or equipment.
Enter cap cost, residual, lease term, and money factor to find monthly payment and total cost.
How Lease Payments Are Calculated
A lease payment has two components: the depreciation fee and the finance fee.
Depreciation Fee covers the value the asset loses over the lease term:
Depreciation Fee = (Capitalized Cost − Residual Value) ÷ Lease Term (months)
Finance Fee is the interest charge on the combined value of the asset:
Finance Fee = (Capitalized Cost + Residual Value) × Money Factor
Total Monthly Payment:
Monthly Payment = Depreciation Fee + Finance Fee
Converting APR to Money Factor
Dealers quote money factor, but you may know the APR:
Money Factor = APR ÷ 2400
For example, a 3% APR equals a money factor of 0.00125.
Key Terms Defined
- Capitalized Cost (Cap Cost): The negotiated price of the vehicle or equipment — the starting value of the lease.
- Residual Value: The estimated value at the end of the lease term. A higher residual = lower monthly payment.
- Money Factor: The lease equivalent of an interest rate. Multiply by 2400 to convert to APR.
- Lease Term: The number of months in the lease contract (typically 24, 36, or 48 months).
Worked Example
A $35,000 car with an $18,000 residual value, 36-month lease, money factor 0.00125:
- Depreciation Fee = ($35,000 − $18,000) ÷ 36 = $472.22/month
- Finance Fee = ($35,000 + $18,000) × 0.00125 = $66.25/month
- Monthly Payment = $472.22 + $66.25 = $538.47
- Total paid over lease = $538.47 × 36 = $19,384.92
- Total interest (finance charges) = $66.25 × 36 = $2,385.00
Lease Term Comparison (same car, $35K cap cost, $18K residual, 0.00125 MF)
| Term | Monthly Payment | Total Paid |
|---|---|---|
| 24 months | $625.00 + $66.25 = $691.25 | $16,590 |
| 36 months | $472.22 + $66.25 = $538.47 | $19,385 |
| 48 months | $354.17 + $66.25 = $420.42 | $20,180 |
Pro Tips
- Negotiate the cap cost, not just the monthly payment. A lower cap cost reduces both fees.
- A higher residual value significantly lowers your payment — favor makes with strong residual values (Toyota, Honda, BMW typically hold value well).
- Money factors below 0.00100 are excellent deals. Above 0.00250 is expensive.
- Always ask the dealer for the money factor and residual value in writing before signing.
- Sales tax and fees are not included in this base formula — add them separately.
How we build and check this calculator
This calculator runs entirely in your browser, so the numbers you enter stay on your device. The math behind it is written by hand and tested against worked examples and standard references before the page goes live.
SuperGlobalCalculator is independently built and maintained. See how we build and verify our calculators.