Auto Lease Calculator Calculate your monthly lease payment, understand the total cost of leasing, and compare it with buy...
Auto Lease Calculator
Calculate your monthly lease payment, understand the total cost of leasing, and compare it with buying a car.
Illustration: Your lease payment is composed of depreciation (the loss in value of the car), interest (the finance charge), and sales tax.
| Month | Payment | Depreciation | Interest | Balance |
|---|
An auto lease is a long-term rental agreement for a vehicle. Instead of buying the car outright, you pay to use it for a set period (usually 24 to 60 months). At the end of the lease, you return the car to the dealership or have the option to buy it for its residual value.
Leasing is often attractive because:
- Lower Monthly Payments — You're only paying for the car's depreciation during the lease term, not its entire value.
- Drive New Cars More Often — You can get a new car every few years without the hassle of selling or trading in your old one.
- Warranty Coverage — Most leases are covered under the manufacturer's warranty for the entire term, so you're less likely to pay for major repairs.
However, leasing also has drawbacks:
- No Ownership — You don't own the car at the end of the lease, so you have no equity.
- Mileage Limits — Most leases have annual mileage limits (e.g., 10,000–15,000 miles). Exceeding them can result in expensive fees.
- Wear and Tear Fees — You may be charged for excessive wear and tear when you return the car.
Leasing can be a smart financial decision if you:
- Want Lower Payments — If you want to drive a more expensive car than you could afford to buy, leasing can make it possible.
- Don't Drive Many Miles — If you keep your driving within the mileage limit, you avoid extra charges.
- Like New Cars — If you enjoy having the latest features and technology, leasing allows you to upgrade every few years.
- Want Predictable Costs — With a lease, you know exactly what your monthly payment will be, and you're usually covered by warranty for repairs.
Rule of Thumb: Leasing is best for drivers who want lower payments, drive fewer than 15,000 miles per year, and prefer to drive new cars every few years. Buying is better if you plan to keep the car for many years or drive a lot of miles.
To calculate your lease payment, enter:
- MSRP — The Manufacturer's Suggested Retail Price of the car.
- Selling Price — The negotiated price you've agreed upon with the dealer. This is often lower than the MSRP.
- Residual Value — The estimated value of the car at the end of the lease, expressed as a percentage of the MSRP. This is usually provided by the dealer.
- Lease Term — The number of months you'll lease the car.
- Money Factor — The interest rate for the lease, often provided by the dealer. To convert it to an APR, multiply by 2400.
- Sales Tax — The sales tax rate in your state.
Click “Calculate Lease Payment” to see:
- Your monthly lease payment
- Total lease cost before tax
- Sales tax on lease payments
- Total cost of lease including tax
- Residual value at the end of the lease
- A visual chart showing the breakdown of your payment (depreciation, interest, tax)
- An amortization table with details for each month
Note: This calculator assumes a closed-end lease with no down payment. It does not account for acquisition fees, disposition fees, or excess mileage charges.