dopecalc

Lease Calculator

Calculate your monthly lease payment, total lease cost, and buyout amount for a vehicle lease using the money factor method.

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Convert: MF = APR / 2400

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Acquisition fee, doc fee, title, registration, sales tax

About this Calculator

Calculate your monthly lease payment, total lease cost, and buyout amount for a vehicle lease using the money factor method.

Formula & Calculations

Formula

Monthly Lease = (Adjusted Cap Cost - Residual Value) / Term + (Adjusted Cap Cost + Residual Value) × Money Factor; APR = Money Factor × 2400
Where:
  • VP=Vehicle purchase price (MSRP or negotiated price)
  • RV%=Residual value percentage of the vehicle price at lease end
  • RV=Residual value = Vehicle Price × Residual %
  • MF=Money factor (lease interest rate expressed as a decimal)
  • DP=Down payment or capitalized cost reduction
  • TF=Taxes, acquisition fee, and other lease fees
  • ACC=Adjusted capitalized cost = Vehicle Price - Down Payment + Fees

Assumptions

  • The money factor can be converted to an equivalent APR by multiplying by 2400.
  • Depreciation is calculated as straight-line over the lease term.
  • Finance fees are applied to the average of the adjusted cap cost and residual value.
  • Does not include excess mileage or wear-and-tear charges at lease end.

Calculation Examples

Example 1

Inputs:Price: $40,000, Residual: 55%, Term: 36mo, MF: 0.0025, Down: $3,000, Fees: $1,500
Result:Monthly Payment: $684, Total Lease Cost: $27,624, Buyout: $22,000, APR: 6.00%

With a $22,000 residual and $38,500 adjusted cap cost, the depreciation fee is $458/mo and finance fee is $151/mo, totaling $684/month.

Example 2

Inputs:Price: $35,000, Residual: 60%, Term: 24mo, MF: 0.00100, Down: $2,000, Fees: $1,200
Result:Monthly Payment: $579, Total Lease Cost: $16,096, Buyout: $21,000, APR: 2.40%

With a lower money factor (2.4% APR) and higher residual, monthly payments are relatively low for a short-term lease.

Example 3

Inputs:Price: $50,000, Residual: 45%, Term: 48mo, MF: 0.00350, Down: $5,000, Fees: $2,000
Result:Monthly Payment: $940, Total Lease Cost: $50,120, Buyout: $22,500, APR: 8.40%

A high money factor, low residual value, and long term result in expensive monthly payments that approach the cost of financing the vehicle.

Frequently Asked Questions

What is a money factor in a lease?

The money factor is the lease equivalent of an interest rate. To convert to APR, multiply by 2400. For example, a money factor of 0.0025 equals a 6% APR. You can negotiate the money factor just like an interest rate on a loan.

Is leasing or buying a car better?

Leasing typically results in lower monthly payments and lets you drive a new car every few years. Buying builds equity and has no mileage limits. Leasing is better if you want lower payments and a new car often. Buying is better if you drive many miles or keep cars long-term.