Lease Calculator
Calculate vehicle lease payments and compare leasing vs buying options
Lease Calculator
Calculate vehicle lease payments and compare leasing vs buying options
Vehicle Details
Estimated value at lease end (typically 50-70% of MSRP)
Lease interest rate (multiply by 2400 for APR equivalent)
Financial Details
Understanding Vehicle Leasing
Vehicle leasing allows you to drive a new car for a set period while paying only for the depreciation during that time. Understanding the key components of a lease helps you make informed decisions and negotiate better terms.
Key Lease Components
- Capitalized Cost: The agreed-upon value of the vehicle
- Residual Value: Estimated value at lease end
- Money Factor: Interest rate (multiply by 2400 for APR)
- Depreciation: Difference between cap cost and residual
- Rent Charge: Interest cost of leasing
Types of Leases
- Closed-End Lease: Return at end with no obligation to buy
- Open-End Lease: Responsible for difference if value is lower
- Single-Pay Lease: Pay entire lease amount upfront
- Multiple Security Deposit: Reduce money factor with deposits
Lease Payment Calculations
Monthly Depreciation
(Cap Cost - Residual Value) ÷ Lease Term
Amount paid for vehicle depreciation
Monthly Rent Charge
(Cap Cost + Residual Value) × Money Factor
Interest cost for financing the lease
Money Factor to APR
Money Factor × 2400 = APR
Convert money factor to interest rate
Total Monthly Payment
Depreciation + Rent Charge + Tax
Your total monthly lease payment
Lease vs Buy Decision
Leasing Advantages
- • Lower monthly payments
- • Always drive newer vehicles
- • Warranty coverage throughout lease
- • No maintenance worries (typically)
- • No depreciation risk
- • Tax advantages for business use
Buying Advantages
- • Own an asset with value
- • No mileage restrictions
- • Freedom to modify vehicle
- • Lower long-term costs
- • Can sell anytime
- • Build equity over time
Lease Negotiation Tips
What to Negotiate
- • Capitalized cost (vehicle price)
- • Money factor (interest rate)
- • Residual value (if possible)
- • Acquisition and disposition fees
- • Included maintenance packages
- • Excess wear and tear definitions
Red Flags to Avoid
- • Excessive upfront payments
- • Very low residual values
- • High money factors
- • Unreasonable wear charges
- • Limited mileage allowances
- • Hidden fees and charges
Frequently Asked Questions
What credit score do I need to lease a car?
Most lenders prefer a credit score of 620 or higher for vehicle leasing. Scores above 700 typically qualify for the best lease terms and promotional rates.
Is it better to lease or buy a car?
It depends on your priorities. Lease if you want lower payments, newer cars, and don't drive many miles. Buy if you want to build equity, drive extensively, or plan to keep the car long-term.
What happens if I exceed my mileage limit?
You'll pay excess mileage fees, typically $0.15-$0.30 per mile over the limit. It's often cheaper to buy additional miles upfront than pay the excess fees later.
Can I buy my leased car at the end?
Most leases include a purchase option at the predetermined residual value. Compare this price to the car's market value to determine if it's a good deal.