Calculate your car lease monthly payment using MSRP, residual value, and money factor. Includes a money factor to APR converter and full cost breakdown.
Input the car MSRP, negotiated sale price, down payment, lease term, and annual mileage.
Enter the residual value percentage and either the money factor or APR. Use the converter if you have one and need the other.
View your monthly payment, total lease cost, due-at-signing amount, and the equivalent APR for easy comparison.
Money factor is the interest rate expressed in lease terms. Multiply by 2,400 to convert to an equivalent APR. For example, a money factor of 0.00250 equals a 6% APR. A money factor starting with 0.001 or lower is generally considered a good rate.
Residual value is the estimated worth of the car at the end of the lease — set by the leasing company (not the dealer). It is expressed as a percentage of MSRP. A higher residual value means lower monthly payments because you are financing less depreciation.
Capitalized cost (cap cost) is effectively the price you pay for the car in the lease — equivalent to the selling price in a purchase. Negotiating the cap cost down, just like negotiating a purchase price, directly lowers your monthly payment.
Generally no. Unlike a purchase, a down payment on a lease is not refunded if the car is totalled — the insurance payout goes to the leasing company, not you. It is usually better to keep cash and put as little down as possible on a lease.
At lease end you have three options: return the car and walk away, purchase it at the predetermined residual value, or lease a new car. If the car is worth more than the residual value in the market, buying it out and selling can be profitable.
Most leases include 10,000-15,000 miles per year. Excess mileage charges run $0.15 to $0.25 per mile. At $0.25/mile, driving 5,000 over-limit miles costs $1,250. Budget carefully for mileage or negotiate higher annual mileage upfront at lease signing.
Buying is almost always cheaper over the long term. Leasing perpetually means perpetual payments with no asset at the end. Leasing makes sense if you want a new car every 3 years, prefer lower monthly payments, or the business use allows tax deductions.
The acquisition fee (also called bank fee or admin fee) is charged by the leasing company to set up the lease. It typically runs $400 to $900 and is usually non-negotiable. It is usually capitalized into the lease rather than paid upfront.
