Auto Lease Calculator

Calculate your monthly payment, depreciation, interest, tax, and money factor for an auto lease with specified parameters.

Monthly Payment Formula

$416.67 + $100 + $35 = $551.67.A car buyer pays $551.67 monthly for a $30,000 vehicle leased for 36 months. This includes depreciation, interest, and a 7% sales tax. The total reflects the monthly cost of ownership.

Monthly Depreciation Formula

$15,000 / 36 = $416.67.For a car with a $30,000 value and a $15,000 residual after 3 years (36 months), the monthly depreciation is $416.67. This is the portion of the vehicle’s value lost each month.

Monthly Interest Formula

($25,000 + $15,000) × 0.0025 = $100.With a $25,000 adjusted capitalized cost, $15,000 residual, and a 0.0025 money factor (6% APR), the monthly interest is $100. This reflects financing costs.

Monthly Tax Formula

$500 × (7% / 100) = $35.A pre-tax payment of $500 with a 7% sales tax results in $35 monthly tax. This is added to the base payment.

Money Factor Formula

(6% / 100) / 24 = 0.0025.A 6% annual percentage rate (APR) converts to a 0.0025 money factor. This decimal is used to calculate monthly interest charges in leasing.

Auto Lease Meaning

An auto lease is a long-term rental agreement for a vehicle. Instead of buying the car outright, you pay to use it for a fixed period (typically 2-4 years). Monthly payments are calculated based on the car’s expected depreciation during the lease term, plus additional fees.

At the end of the lease, you return the car or can choose to buy it at a predetermined price. Leases often include mileage limits and require the vehicle to be maintained in good condition to avoid extra charges for excess wear or usage.

Benefits include lower monthly payments compared to financing a purchase and the ability to drive newer models more frequently. However, you won’t own the vehicle unless you purchase it after the lease ends. This option suits those prioritizing flexibility, lower upfront costs, and regular upgrades.