Auto Lease Calculator
Calculate your monthly car lease payment from the negotiated price, residual value, money factor, and term — with an optional down payment (cap cost reduction).
Last updated: August 2026
Additional Costs (optional)
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Payment Breakdown
Lease Summary
| Adjusted Cap Cost | — |
| Total Lease Cost | — |
| End-of-Term Buyout | — |
| Disposition Fee (at lease end) | — |
| Est. Excess Mileage Charge | — |
How a Car Lease Payment Is Calculated
A car lease payment only charges you for the value the car loses while you drive it, plus a financing charge — it's never financing the vehicle's full price the way a car loan does. After any down payment lowers the negotiated price, the payment splits into two pieces:
M: the monthly lease payment.
C: the adjusted capitalized cost — negotiated price minus any down payment / cap cost reduction.
R: the residual value at lease-end.
n: the lease term in months.
F: the money factor.
Cap Cost Reductions Cut the Payment, but Cost You Cash Upfront
Cash put down on a car lease is a capitalized cost reduction. It lowers the adjusted cap cost before either fee is calculated, so both the depreciation piece and the finance piece shrink for every remaining month. The trade-off is that the money is gone for good if the car is totaled or stolen early in the term, and it builds no equity you can later sell, which is why many shoppers keep the reduction small and let the monthly payment absorb more.
Residual Value Is Usually Set by the Lessor
The residual is normally published by the leasing company as a percentage of the sticker price for each model and term, so you rarely negotiate it directly. A car that holds its resale value well leaves less depreciation to pay for, which can make a pricier model cheaper to lease than a cheaper one with a weak residual. That is worth testing here by changing only the residual and watching the depreciation fee.
Money Factor Versus APR
Dealers often quote leases with a money factor such as 0.00125 instead of a percentage rate. Multiply by 2400 to translate it into an approximate APR — 0.00125 becomes 3 percent, and 0.0025 becomes 6 percent. If a dealer only shows you a payment, ask for the money factor, the residual, and the adjusted cap cost separately so you can rebuild the payment yourself in this calculator and spot a marked-up rate.
Mileage Allowance and Overage Charges
Unlike most equipment leases, a car lease sets an annual mileage allowance and charges a per-mile fee for miles beyond it, tallied across the full term at return. This calculator compares your allowance with your realistically expected annual driving and multiplies the excess by your per-mile rate. If you expect to go over, it can be cheaper to buy extra miles upfront in the contract than to pay the overage rate at the end — ask what the lessor charges for each option.
Lease or Buy: What Actually Differs
A lease payment is lower mainly because you are only paying for a slice of the car's value, but you own nothing at the end unless you exercise the buyout. Buying costs more per month, yet the loan eventually ends and the car is yours to keep driving without mileage limits or wear-and-tear standards. Leasing fits someone who wants a newer car every few years and drives predictable miles; buying fits someone who keeps cars for a long time.
Worked Example
A 35,000-dollar vehicle with a 2,000-dollar down payment (cap cost reduction), an 18,000-dollar residual value, a money factor of 0.00125, over a 36-month lease: the adjusted cap cost is 33,000 dollars. The depreciation fee is (33,000 − 18,000) ÷ 36, or about 417 dollars a month. The finance fee is (33,000 + 18,000) × 0.00125, or about 64 dollars a month. The total monthly payment comes to roughly 481 dollars, with an approximate APR of 0.00125 × 2400, or 3%.
Auto Lease Terms You Should Know
Cap Cost Reduction — cash, a trade-in credit, or a rebate applied at signing to reduce the adjusted capitalized cost.
Adjusted Cap Cost — the negotiated price, plus any rolled-in fees, minus cap cost reductions; the C in the payment formula.
Residual Value — the lessor's estimate of the car's worth at lease-end, which also serves as the buyout price.
Acquisition Fee — a one-time leasing-company charge, commonly a few hundred dollars, that is usually rolled into the adjusted cap cost, raising the payment slightly for every month.
Disposition Fee — a one-time charge, also commonly a few hundred dollars, billed at lease-end if you return the car rather than buy it; it is not part of the monthly payment.
Excess Mileage Charge — the per-mile fee applied to miles driven beyond the contract's allowance.
Sources & Further Reading
- Federal Trade Commission — Financing or Leasing a Car: consumer advice on comparing financing and leasing, down payments, and getting pricing in writing.
- Federal Trade Commission — Consumer Leasing Act: the federal law requiring lessors to disclose the costs and terms of consumer leases.
- Consumer Financial Protection Bureau — Auto Loans: the CFPB's hub for shopping for and managing vehicle financing.
This calculator provides an estimate for planning purposes only, not a lease offer or financial advice. Actual lease terms, fees, taxes, and money factors depend on the dealer and leasing company.
Frequently Asked Questions
Does a down payment on a lease work the same way it does on a car loan?
It has a similar effect but a different name — a lease down payment is usually called a capitalized cost reduction, and it lowers the negotiated price the lease payment is calculated from, the same way a loan down payment lowers the amount financed. Unlike a loan, that money isn't building equity in something you'll own unless you buy the car at lease-end.
Why is residual value so important on a car lease?
The residual value is the manufacturer's or leasing company's estimate of what the car will be worth at the end of the lease — the higher that estimate, the less depreciation you're paying for each month, which directly lowers your payment. It's also the price you'd pay to buy the car at lease-end.
What lease terms are most common for cars?
24, 36, and 39 months are the most common, with 36 months being the most typical because it often lines up with the manufacturer's factory warranty. Shorter terms mean higher monthly payments but let you switch vehicles more often; longer terms lower the payment but usually push you past the warranty period.
Does this calculator include sales tax and lease fees?
Yes, as optional fields — most U.S. states tax the monthly lease payment itself rather than the full vehicle price, so enter your state's rate in "Sales Tax Rate (%)" to apply it. "Acquisition Fee" rolls a one-time bank/leasing fee into the adjusted cap cost (raising the payment slightly), while "Disposition Fee" is a one-time lease-end charge shown separately in the Lease Summary, since it's never part of the monthly payment. All three default to 0.
What happens if I drive more than my mileage allowance?
Most leases charge a per-mile fee, commonly 15 to 30 cents, for every mile you drive beyond the annual allowance over the whole lease term. Enter your allowance, your realistically expected annual mileage, and the per-mile rate to see the estimated charge due at lease-end in the Lease Summary.
Should I lease this car or buy it instead?
It depends on the loan APR and down payment you could get for a purchase, and how the car's residual value compares to what you'd still owe on a loan. Use the Compare to Buying Instead section on this calculator to check your own numbers, or run the full numbers on the Auto Loan Calculator — leasing tends to win on lower monthly cost and no resale hassle, while buying tends to win if you plan to keep the car well past the loan term and can secure a low rate.