Car lease payment calculator
A lease payment is depreciation plus rent charge. The money factor is an interest rate in disguise: multiply it by 2400 to get an APR.
Multiply by 2400 for the equivalent APR.
months
%
Monthly payment
555.21
- Depreciation portion
- 388.89
- Rent charge portion
- 130.00
- Equivalent APR
- 6.000 %
- Total cost of the lease
- 21 987.60
Show the working
- Capitalised cost = 35 000
- Down payment and rebates = 2000
- Residual value at end = 19 000
- Money factor = 0.0025
- Term = 36
- Sales tax on the payment = 7
- net_cap = 35 000 - 2000 = 33 000
- Depreciation portion = (33 000 - 19 000) / 36 = 388.889
- Rent charge portion = (33 000 + 19 000) * 0.0025 = 130
- base = 388.889 + 130 = 518.889
- tax = 518.889 * 7 / 100 = 36.3222
- Monthly payment = 518.889 + 36.3222 = 555.211
- Equivalent APR = 0.0025 * 2400 = 6
- Total cost of the lease = 555.211 * 36 + 2000 = 21 987.6
Values are shown to six significant figures here; the arithmetic itself runs on exact fractions and is only rounded where a number is printed.
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The formula
- depreciation = (net capitalised cost - residual) / months
- rent charge = (net capitalised cost + residual) x money factor
- APR = money factor x 2400
Tax treatment of leases varies by jurisdiction; some tax the whole payment, some only the depreciation.
This is arithmetic, not financial advice. Real products carry fees, tax treatment and terms that no formula captures.