Monthly car lease payment from price, residual and money factor, with sales tax
Estimates only, not financial advice. What you type stays on your device. Checked against sources on 29 Sept 2026.Enter the MSRP, negotiated price, down payment, residual percentage, money factor and term to see the monthly lease payment split into depreciation fee, finance fee and sales tax. A money factor of 0.00125 equals about 3% APR, since APR is the money factor times 2,400.
Rates and rules read from Federal Reserve, Keys to Vehicle Leasing on 29 Sept 2026; they may have changed since.
Enter the MSRP (sticker price), the Negotiated price (cap cost) and any Fees rolled in.
Add Cash down (cap cost reduction) and Trade-in equity, then the Residual, % of MSRP, Money factor and Term from the dealer's offer.
Set the Sales tax rate, state plus local, and choose On each payment or Upfront on all payments.
Read the Lease payment with the Depreciation fee and Finance fee (rent charge), and open How the payment is built; Share result copies a link.
A car lease payment is not a loan payment on the price of the car. You pay for the value the car loses while you have it, plus a finance charge, plus sales tax in most states. This calculator shows each part, so you can check a dealer's worksheet line by line.
Depreciation fee. The adjusted capitalized cost (the negotiated price plus any fees rolled in, less your cash down and trade-in) minus the residual value, divided by the months. The residual is the car's expected value at the end, set by the lender as a percentage of MSRP, not of the price you negotiated.
Finance fee. The adjusted cap cost plus the residual, times the money factor. A money factor is an interest rate written differently; multiply it by 2,400 for the approximate APR, so 0.00125 is about 3%.
Sales tax. Most states tax each monthly payment, which is the default here. A few collect tax at signing on the total of the payments; choose "Upfront" for that. Some states tax the full price of the car or the cash down payment as well, which this calculator does not model, so check your state's rule and enter your combined state and local rate.
Lease or buy. The comparison finances the same car at the loan APR you enter, with sales tax on the price and the same cash down. It counts what you would pay over the lease term either way, then subtracts the equity a buyer would own at the end, valuing the car at the lease's residual.
What it does not do. It leaves out the security deposit, registration, mileage and wear charges, and the disposition fee at turn-in. The figures on the page are examples; copy the real ones from the dealer's lease worksheet.
Take the adjusted cap cost, subtract the residual value and divide by the months: that is the depreciation fee. Add the adjusted cap cost and the residual and multiply by the money factor: that is the finance fee. Their sum is the base payment, and sales tax usually goes on top of it.
Multiply the money factor by 2,400. A money factor of 0.00125 is about 3.0% APR, and 0.0025 is about 6.0%. The conversion is a convention and approximate, but it is close enough to compare a lease offer with a loan rate. Dealers can mark the money factor up, so ask for the buy rate.
In most states, sales tax is charged on each monthly payment, so you pay tax only on the part of the car you use. A few states collect it at signing on the total of the payments, and some tax the cash down payment or the full price. Enter your combined state and local rate.
The residual is what the lender expects the car to be worth when the lease ends, set as a percentage of MSRP. A higher residual means less depreciation to pay, so a lower payment. Leasing companies publish residuals by model and term each month; the dealer's worksheet shows the one being used.
A cap cost reduction lowers the monthly payment, but mostly by prepaying depreciation, so the total cost barely changes. If the car is stolen or totaled early, gap coverage pays the lender, not you, and the down payment is usually lost. Many buyers put as little down as possible for that reason.
Over the lease term, leasing usually costs less cash, but buying leaves you with equity. This calculator subtracts that equity, valuing the car at the residual, to compare the two fairly. Over many years, keeping a bought car after the loan is paid off is normally the cheapest option.
Rates and rules change; check the source before you rely on a figure.
Still stuck? Ask about Auto Lease Calculator and anybody who knows can answer. No account needed.
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Also works as: Car Lease Calculator.
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