Auto Lease Calculator
Understanding Your Auto Lease Calculator
What is an Auto Lease Calculator?
An auto lease calculator helps you estimate your monthly lease payments based on the vehicle price, down payment, lease term, money factor, residual value, and sales tax. It helps you compare leasing versus buying options and make informed financial decisions.
How the Calculator Works
The calculator uses the following components to estimate your monthly lease payment:
- Vehicle price minus down payment (capitalized cost)
- Depreciation over the lease term
- Finance charges based on the money factor
- Sales tax applied to the monthly payment
The Mathematical Formula
The monthly lease payment is calculated as:
Monthly Payment = Depreciation + Finance Charge + Sales Tax
Where:
Depreciation = (Capitalized Cost - Residual Value) / Lease Term
Finance Charge = (Capitalized Cost + Residual Value) × Money Factor
Sales Tax = Monthly Payment × Sales Tax Rate
This formula helps you understand the breakdown of your lease payments and compare leasing options.
Key Components Explained
Vehicle Price
The total price of the vehicle before any down payment or taxes.
Down Payment
The upfront payment that reduces the capitalized cost of the lease.
Lease Term
The duration of the lease in months.
Money Factor
The interest rate expressed as a decimal used to calculate finance charges.
Residual Value
The estimated value of the vehicle at the end of the lease term.
Sales Tax Rate
The applicable sales tax rate on the monthly lease payment.
Tips for Auto Leasing
- Understand all lease terms and fees before signing
- Consider total cost of lease, not just monthly payment
- Check for mileage limits and penalties
- Compare leasing vs buying based on your financial goals
- Negotiate money factor and residual value