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).
Calculator verified • Last updated: August 2026
Additional Costs (optional)
—
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.
A Down Payment Lowers the Cap Cost, Not the Car's Price
Putting cash down on a lease (a "cap cost reduction") works by lowering the C in the formula above before either fee is calculated — it directly shrinks both the depreciation fee and the finance fee every month for the rest of the term. Unlike a loan down payment, this money doesn't build equity in a car you'll eventually own outright unless you exercise the buyout option at lease-end.
Residual Value Is Set for You, and It Matters a Lot
Unlike a loan, where you and the lender agree on nearly every number, the residual value on most leases is set by the manufacturer or leasing company based on the vehicle's expected resale value — you generally can't negotiate it. A model with a strong residual value (meaning it holds its value well) produces a noticeably lower lease payment than one with a weak residual, even at the identical negotiated price.
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 — a lease's version of a down payment: cash paid upfront that lowers the negotiated price the lease payment is calculated from.
Residual Value — the projected value of the vehicle at lease-end, usually set by the manufacturer and also the price you'd pay to buy the car outright when the lease ends.
Money Factor — a small decimal figure used in place of an interest rate for lease financing; multiply by 2400 for an approximate APR.
Acquisition Fee — a one-time bank or leasing-company fee (typically 895) that's usually rolled into the adjusted cap cost rather than paid upfront, which raises the depreciation fee slightly for every month of the term.
Disposition Fee — a one-time fee (typically 500) charged at lease-end if you return the car instead of exercising the buyout option — not part of the monthly payment, but a real cost of walking away from the lease.
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.