Free Car Lease Calculator
Estimate your monthly lease accurately. Input the vehicle price, residual value, and interest rate to calculate your true monthly payment including tax.
Last Updated: 15 Jan 2026
Vehicle Details
Estimate Lease Payments
Enter residual value and price to start
What is Car Leasing?
Car leasing is a form of long-term vehicle rental where you pay for the vehicle's depreciation during the lease term, plus interest and fees. Unlike buying, you don't own the car at the end of the lease—you return it or have the option to purchase it at the residual value. Leasing typically offers lower monthly payments than financing a purchase, making it attractive for those who want to drive newer vehicles every few years.
Understanding lease calculations helps you negotiate better deals, compare lease offers, and determine if leasing makes financial sense for your situation. Key factors include the vehicle's MSRP, residual value (what it's worth at lease end), money factor (interest rate), down payment, and lease term.
Why Use Our Free Car Lease Calculator?
Accurate Payment Estimates
Calculate monthly lease payments accurately using standard leasing formulas. Factor in residual value, money factor, down payment, and sales tax for precise estimates.
Deal Comparison
Compare different lease offers from dealers. Input various terms, residual values, and money factors to see which deal provides the best value.
Negotiation Tool
Understand lease calculations before negotiating with dealers. Know what you should pay and avoid overpaying by understanding how lease payments are calculated.
Common Use Cases for Car Lease Calculator
Lease Shopping
Compare Lease Offers
Compare lease offers from different dealers or manufacturers. Input various terms, residual values, and money factors to find the best deal.
Verify Dealer Quotes
Double-check dealer lease quotes to ensure accuracy. Calculate payments yourself to verify you're getting a fair deal and not being overcharged.
Budget Planning
Determine if a lease payment fits your budget. Calculate monthly payments including taxes and fees to plan your monthly expenses accurately.
Financial Decision Making
Lease vs Buy Analysis
Compare total lease costs vs purchase costs. Understand the financial implications of leasing vs buying to make informed decisions.
Down Payment Impact
See how different down payment amounts affect monthly payments. Determine optimal down payment to balance monthly cost and upfront cash.
Term Length Analysis
Compare 24-month, 36-month, and 48-month lease terms. Longer terms typically mean lower monthly payments but higher total cost.
Leasing vs. Buying: Key Differences
Leasing Advantages
- • Lower monthly payments: You only pay for depreciation, not the full vehicle value
- • Drive newer vehicles: Get a new car every 2-4 years
- • Warranty coverage: Most leases stay within warranty period
- • No resale hassle: Simply return the car at lease end
- • Lower upfront costs: Typically requires less down payment than buying
Leasing Disadvantages
- • No ownership: You don't own the vehicle at lease end
- • Mileage restrictions: Typically 10,000-15,000 miles/year with fees for excess
- • Wear and tear charges: Must return car in good condition or pay fees
- • Higher long-term cost: Continuous leasing means perpetual payments
- • Early termination fees: Expensive to end lease early
When Leasing Makes Sense
Leasing works best if you want lower monthly payments, prefer driving newer vehicles, stay within mileage limits, and don't mind not owning the car. Ideal for business use (tax benefits) or those who change cars frequently.
When Buying Makes Sense
Buying is better if you drive many miles, want to own the vehicle, plan to keep it long-term, or want to avoid mileage and wear restrictions. Better for building equity and long-term value.
Understanding Key Lease Terms
MSRP (Manufacturer's Suggested Retail Price)
The sticker price of the vehicle before any discounts or negotiations. This is the starting point for lease calculations.
Tip: Negotiate the capitalized cost (lease price) below MSRP for better lease terms.
Residual Value
The estimated value of the vehicle at lease end, expressed as a percentage of MSRP. Higher residual value means lower monthly payments.
Example: 60% residual on $30,000 car = $18,000 buyout price at lease end.
Money Factor
The lease equivalent of an interest rate, expressed as a decimal. Multiply by 2,400 to get approximate APR percentage.
Example: Money factor 0.0025 = approximately 6% APR (0.0025 × 2,400).
Capitalized Cost (Cap Cost)
The negotiated price of the vehicle for leasing purposes. Lower cap cost means lower monthly payments.
Tip: Negotiate cap cost reduction (down payment) to lower monthly payments.
Frequently Asked Questions
What is Residual Value?
Residual Value is the estimated worth of the car at the end of the lease term. A higher residual value generally leads to lower monthly payments because you're paying for less depreciation.
How do I convert Money Factor to APR?
Multiply the Money Factor by 2,400 to get the approximate APR percentage. For example, a Money Factor of 0.0025 equals roughly 6% APR (0.0025 × 2,400 = 6%).
Does this include taxes?
Yes, you can input your local sales tax rate, and the calculator will add it to your monthly payment. Sales tax is typically calculated on the monthly lease payment amount.
What happens if I exceed mileage limits?
Most leases charge 15-25 cents per mile over the limit. For example, exceeding by 5,000 miles at 20 cents/mile costs $1,000. Consider your driving habits when choosing mileage limits.
Is leasing better than buying?
Leasing offers lower monthly payments and newer cars more often, but you won't own the car. Buying builds equity but has higher monthly costs. Choose based on your priorities.
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