Car Lease Calculator 2026
Get the exact monthly payment on any car lease, with real money factor, residual value, and depreciation math. The same formulas dealers use, with no markups hidden.
Last updated April 2026 · Sources: Edmunds Car Lease Calculator methodology, Kelley Blue Book leasing guide, Bankrate auto lease calculator
Lease terms
Payment breakdown
How a lease payment is built
Three components, calculated from four numbers (cap cost, residual, money factor, term). Once you understand this math, you can spot a bad lease deal in 30 seconds.
Frequently Asked Questions
What is a money factor and how does it work?
The money factor is the lease equivalent of an interest rate. It looks like a tiny decimal: 0.00250 is a typical example. To convert it to an APR, multiply by 2,400 — so 0.00250 equals a 6% APR. To convert APR to money factor, divide by 2,400. Money factors vary by credit tier and manufacturer just like interest rates do, and they are often negotiable, even though dealers will tell you they are not. Always ask for the "buy rate" from the captive finance arm and watch for dealer markups.
What is residual value and why does it matter?
The residual value is what the leasing company predicts the car will be worth at the end of the lease term, expressed as a percentage of MSRP. A higher residual means lower monthly payments because you are only financing the depreciation between the cap cost and the residual. Cars with strong resale values like Toyota, Honda, and Porsche typically have residuals in the 60-70% range for a 36-month lease. Cars that depreciate fast (some domestic sedans, some luxury brands) may have residuals in the 45-55% range, leading to much higher monthly payments on the same MSRP.
How is a lease payment actually calculated?
Three components: monthly depreciation, monthly rent charge (interest), and tax. Depreciation = (adjusted cap cost − residual) / months. Rent charge = (adjusted cap cost + residual) × money factor. Tax = (depreciation + rent) × tax rate. Add them together for your total monthly payment. On a $40,000 MSRP car negotiated to $38,000 with 60% residual, $2,000 down, 6% APR, 36-month lease, and 6% sales tax, the monthly payment works out to roughly $512.
Should I put money down on a lease?
Generally no. Most lease experts recommend the lowest possible "drive-off" amount, ideally just the first months payment and any required fees. The reason: if your leased car is totaled or stolen in the first few months, gap insurance covers the loan payoff but you do not get your down payment back. Putting money down on a lease is essentially pre-paying depreciation that you forfeit if anything goes wrong. Sign-and-drive (zero down) leases are common.
What is the "1% rule" for leases?
A quick benchmark: a competitive lease payment is roughly 1% of the vehicles MSRP per month, with minimal money down. On a $40,000 car, that target is $400/month. On a $60,000 car, target $600/month. If your quoted payment is well above 1%, the dealer is probably marking up the money factor, the cap cost is too high, or the residual is below market. Strong manufacturer incentives can drop payments well below 1% on specific models, especially at quarter end.
What happens at the end of a car lease?
You have three choices: turn it in and walk away (paying any disposition fee, typically $300-500, plus charges for excess mileage and wear), buy the car at the residual value (if the market value is higher than the residual, this can be a great deal), or trade it in toward a new lease or purchase (the dealer essentially handles the lease return for you). Inspect the car before turn-in and address minor wear yourself — small dings and scuffs cost much less to fix than dealer repair estimates.
What are the typical fees on a car lease?
Acquisition fee (sometimes called bank fee, $500-1,000, charged at the start of the lease and typically rolled into the cap cost), disposition fee ($300-500, charged at the end if you do not buy or re-lease), and excess mileage charge ($0.15-0.30 per mile over the cap, paid at lease end). Plus normal sales tax, title, and registration. Some leases also charge a security deposit equal to one months payment, but this is increasingly uncommon.
How does mileage cap affect a lease?
Standard leases include 10,000, 12,000, or 15,000 miles per year. Lower mileage caps result in higher residual values and slightly lower monthly payments, but the per-mile penalty for going over is steep — typically $0.15-0.30 per mile. Drivers who genuinely commute 18,000 miles per year are usually better off financing or buying than leasing because the excess mileage charges erase the lease advantage. Buying extra miles upfront is cheaper than paying the overage penalty at the end.
Can I negotiate a car lease?
Yes, three things specifically: the cap cost (your purchase price), the money factor (interest rate), and any dealer add-ons. Residual value and acquisition fees are typically set by the manufacturer captive lender and not negotiable. Get the manufacturers published money factor from a site like Edmunds before negotiating, then push back hard on any markup. The cap cost should be negotiated like a normal car purchase — start from invoice or below.
Is leasing or buying cheaper long-term?
For drivers who keep cars 8-10+ years, buying is dramatically cheaper because you stop making payments after the loan is paid off and the car still has years of useful life. For drivers who replace their car every 3 years anyway, leasing is often comparable or even cheaper because you avoid the depreciation hit of selling a slightly-used car. The break-even point is usually around 4-5 years of ownership — past that, buying wins.
What credit score do I need to lease a car?
Most captive lenders require 680+ for the best money factor tier, with sub-tiers extending down to about 600. Below 620, leases become hard to get and the money factor jumps significantly. Unlike auto loans, leases are less common in the subprime market because the lender is taking residual value risk in addition to credit risk. If your credit is weak, financing a used car often makes more sense than trying to lease.
Can I get out of a lease early?
Yes, but it is expensive. Early termination fees are usually all remaining payments plus a termination fee, minus the cars current market value. Lease transfer services like Swapalease and LeaseTrader let you sell the lease to someone else who takes over the payments — this is usually cheaper than early termination, but the original lessee often remains contingently liable if the new lessee defaults. Always check if your manufacturer allows lease transfers before assuming this is an option.
Sources: Edmunds Car Lease Calculator methodology, Kelley Blue Book Lease Guide, Bankrate Auto Lease Calculator, Federal Reserve consumer leasing disclosures (Regulation M).
Disclaimer: Estimates only. Actual lease terms depend on your credit, region, manufacturer programs, and dealer markups. Always request a written lease worksheet from the dealer before signing.