Lease Calculator

Calculate monthly lease payments, total costs, and interest rates for cars, equipment, or property. Compare leasing vs buying with instant, accurate results.

🚗 Use the Lease Calculator

What is a Lease Calculator?

A lease calculator is an online tool that estimates the monthly payment, total lease cost, and effective interest rate for leasing an asset—typically a car, equipment, or property. It helps you understand the financial commitment of a lease and compare it to buying outright.

By entering key details like asset price, residual value, lease term, and interest rate, you get instant, transparent estimates of your monthly obligations and total costs over the lease period.

This calculator supports two modes: Fixed Rate (calculate monthly payment from interest rate) and Fixed Payment (calculate interest rate from monthly payment), giving you flexibility to analyze different lease scenarios.

How to Use the Lease Calculator

Select your calculation mode: Fixed Rate (if you know the interest rate) or Fixed Payment (if you know the monthly payment).
Enter the Asset Value—the initial price or capitalized cost of the car, equipment, or property you're leasing.
Enter the Residual Value—the estimated value of the asset at the end of the lease term. Higher residual values result in lower monthly payments.
Specify the Lease Term in years and months. Common auto leases are 24, 36, or 48 months.
In Fixed Rate mode, enter the Interest Rate (annual percentage). In Fixed Payment mode, enter the Monthly Payment amount.
Click Calculate to see your results, including monthly payment (or interest rate), total payments, total interest, and depreciation. Review the pie chart to visualize the breakdown of principal vs interest.

Key Insights & Best Practices

Residual Value Matters

A higher residual percentage means you're financing less depreciation, which lowers your monthly payment. For example, a car with a 50% residual after 3 years will have significantly lower payments than one with a 30% residual. Always verify the residual value with your lessor—it's often based on industry guides but can be negotiated.

Interest Rate Transparency

Many lessors quote a 'money factor' instead of an APR. To convert a money factor to an annual percentage rate, multiply by 2,400. For example, a money factor of 0.0025 equals 6% APR. Use this calculator to compare offers and ensure you're getting a competitive rate.

Lease vs Buy Trade-offs

Leasing often offers lower upfront and monthly payments, easier upgrades, and no resale hassle. However, you build no equity and may face fees for excess mileage, wear, or early termination. Buying involves higher payments but long-term ownership and potential resale value. Consider:

Your typical annual mileage and how it compares to lease limits (often 10,000-15,000 miles/year).
Whether you prefer driving a new vehicle every few years or keeping a car long-term.

Test Multiple Scenarios

Use the calculator to explore different lease terms, down payments, and residual values. A shorter term may have higher monthly payments but lower total interest. A larger down payment (cap cost reduction) reduces your monthly obligation but ties up cash upfront.

Verify Dealer Quotes

Compare the calculator's monthly payment to dealer quotes. Large discrepancies may indicate hidden fees, add-ons, or different assumptions about taxes, acquisition fees, or residual value. Always ask for a detailed breakdown of all charges before signing.

Understanding Lease Calculations

Key Inputs Explained

To calculate an accurate lease payment, you need four main inputs:

Asset Value (Capitalized Cost): The initial price of the vehicle, equipment, or property. This may be the MSRP or a negotiated price. Lower asset values reduce your monthly payment.
Residual Value: The estimated value of the asset at lease end. This is often a percentage of the original price (e.g., 50% for a 3-year car lease). Higher residuals mean lower depreciation and lower payments.
Lease Term: The duration of the lease in months or years. Common terms are 24, 36, or 48 months for cars. Longer terms spread depreciation over more months, reducing monthly payments but increasing total interest.
Interest Rate / Money Factor: The annual percentage rate (APR) or money factor used to calculate the finance charge. The finance charge is based on the average of the asset value and residual value over the lease term.

How the Calculation Works

In Fixed Rate mode, the calculator computes the monthly payment as: (Depreciation / Term) + Finance Charge. Depreciation is the difference between asset value and residual value. The finance charge is (Asset Value + Residual Value) × (Monthly Interest Rate / 2).

In Fixed Payment mode, the calculator works backward from your monthly payment to estimate the effective annual interest rate, showing you what rate you're implicitly paying based on the payment amount.

Scenario Analysis

Use the calculator to compare scenarios:

Shorter vs longer terms: A 24-month lease has higher monthly payments but lower total interest than a 48-month lease.
Different residual values: A higher residual (e.g., 55% vs 45%) significantly reduces monthly payments.
Interest rate sensitivity: A 1% change in APR can add or save hundreds of dollars over the lease term.

Frequently Asked Questions

What is the difference between leasing and buying?

Leasing is essentially renting an asset for a fixed term with lower monthly payments and no ownership. Buying involves higher payments but you own the asset outright and can sell it later. Leasing is ideal for those who want lower costs and frequent upgrades; buying is better for long-term value and no mileage restrictions.

How is residual value determined?

Residual value is typically based on industry guides (like ALG or Black Book for cars) that predict the asset's future worth. It's expressed as a percentage of the original price. For example, a $30,000 car with a 50% residual after 3 years is expected to be worth $15,000 at lease end. Higher residuals mean lower depreciation and lower monthly payments.

Can I negotiate the interest rate on a lease?

Yes! The interest rate (or money factor) is often negotiable, especially if you have good credit. Shop around, compare offers from multiple dealers or lessors, and use this calculator to verify the rate you're being quoted. Even a small reduction in rate can save you significant money over the lease term.

What fees should I expect in a lease?

Common lease fees include an acquisition fee (charged at lease start), disposition fee (charged at lease end), security deposit, registration, taxes, and sometimes a down payment or cap cost reduction. Always ask for a detailed breakdown of all fees before signing. Some fees are negotiable.

What happens if I exceed the mileage limit?

Most leases include a mileage limit (e.g., 12,000 miles/year). If you exceed it, you'll pay a per-mile fee (often $0.15-$0.30/mile) at lease end. If you expect to drive more, negotiate a higher mileage limit upfront—it's usually cheaper than paying excess mileage fees later.

Can I end a lease early?

Yes, but early termination typically involves fees and penalties that can be substantial. You may owe the remaining payments, an early termination fee, and the difference between the car's current value and the residual value. Review your lease contract carefully and consider lease transfer or buyout options if you need to exit early.