Calculate your monthly car lease payment using MSRP, residual value, and money factor. Compare leasing vs buying.
This tool estimates your monthly car lease payment based on the vehicle's price, residual value, money factor (lease interest rate), and lease term. It helps compare leasing costs against buying and evaluate different lease offers.
Monthly Payment = Depreciation Fee + Finance Fee. Depreciation Fee = (Vehicle Price − Residual Value) ÷ Lease Term (months). Finance Fee = (Vehicle Price + Residual Value) × Money Factor.
Enter the vehicle's negotiated price, residual value (or percentage), money factor, and lease term, and the calculator returns your estimated monthly lease payment.
Example: A $35,000 vehicle with a $20,000 residual value after a 36-month lease, and a money factor of 0.00125, has a depreciation fee of ($35,000−$20,000)/36 ≈ $416.67 and a finance fee of ($35,000+$20,000) × 0.00125 = $68.75, totaling roughly $485.42 per month.
What is "residual value" in a lease? Residual value is the vehicle's estimated worth at the end of the lease term, set by the leasing company — a higher residual value generally means lower monthly payments, since you're only paying for the depreciation down to that point.
What is a "money factor," and how does it relate to interest rate? Money factor is essentially the lease's interest rate expressed in a different format — multiply the money factor by 2,400 to get an approximate equivalent annual percentage rate for comparison purposes.
Why are lease payments often lower than loan payments for the same car? Lease payments only cover the vehicle's depreciation over the lease term (plus finance charges) rather than the full purchase price, since you're not paying to fully own the car — you're paying for the use of it during the lease period.
Are there mileage limits with car leases? Yes, most leases include an annual mileage allowance (commonly 10,000-15,000 miles), with fees charged for exceeding that limit, so it's important to estimate your actual driving needs before choosing a lease mileage tier.
Should I lease or buy a car? This depends on individual priorities — leasing often offers lower monthly payments and driving a newer car more frequently, while buying builds equity and avoids mileage restrictions, making the better choice dependent on your specific financial situation and driving habits.