Lease Calculator
Estimate lease payment from asset value, residual, rate, and months.
Enter Values
Visual Breakdown
What is a Lease?
A lease is a contractual arrangement where you pay to use an asset (vehicle, property, equipment) for a specified period without owning it. Lease payments cover the asset's depreciation during the lease term plus a financing charge. At the end, you return the asset or have the option to purchase it.
Lease Payment Calculation
Monthly Lease Payment = Depreciation Fee + Finance Fee. Depreciation Fee = (Cap Cost - Residual Value) / Lease Term. Finance Fee = (Cap Cost + Residual Value) x Money Factor. For example: $30,000 cap cost, $18,000 residual, 36 months, 0.0025 money factor: Depreciation = $333/mo, Finance = $120/mo, Total = $453/mo.
Lease vs Buy Comparison
Leasing: Lower monthly payments, no ownership, mileage restrictions, wear-and-tear charges, frequent vehicle changes. Buying: Higher monthly payments, you own the asset, no mileage limits, full responsibility for maintenance, keep vehicle as long as you want. Leasing is better for those who want new cars every 2-4 years; buying is better for long-term cost savings.
Understanding the Money Factor
The money factor is the lease equivalent of an interest rate. To convert to APR: Money Factor x 2,400 = APR. For example, 0.0025 x 2,400 = 6% APR. A lower money factor means lower finance charges. Money factors typically range from 0.001 to 0.005 (2.4% to 12% APR). Your credit score significantly affects the money factor offered.
Common Lease Mistakes
Not negotiating the capitalized cost (it's negotiable like a purchase price). Ignoring the money factor (ask for it and compare). Exceeding mileage limits (estimate accurately before signing). Not understanding wear-and-tear standards. Skipping gap insurance. Focusing only on monthly payment instead of total lease cost.
Comparison Analysis
Lease vs Buy ($30,000 Vehicle, 36 Months)
| Criteria | Lease | Buy (Loan) |
|---|---|---|
| Monthly Payment | $453 | $632 |
| Total Paid (36 months) | $16,308 | $22,752 |
| Ownership After 3 Years | No—return vehicle | Yes—own vehicle worth ~$18,000 |
| Mileage Limit | 12,000/year (typical) | Unlimited |
| Long-Term Cost (6 years) | $32,616 (two 3-year leases) | $22,752 (own outright after 3 years) |
Content Verification
Expert Review
Reviewed by Tom Bradley, Certified Automotive Leasing Professional, Consumer Finance Advocate
Authoritative Sources
Based on CFPB guidelines, FTC consumer protection standards, and automotive industry data
Last Reviewed
Content verified May 2026 against current lease market conditions and consumer finance standards