Auto Lease Calculator to Calculate Monthly Payment with Depreciation and Sales Tax

Automobile Lease Calculator Sign

This free online lease calculator will calculate a car lease payment and give you a breakdown of how much of each payment will be going to depreciation, leasing fees, and sales taxes.

Plus, the calculated results include a lease cost chart showing you the breakdown of the total lease, depreciation, and sales tax costs for the term of the lease.

Finally, the built-in lease money factor calculator will calculate the money factor from a new car lending rate, and the built-in lease residual value calculator will calculate the depreciation percentage from the residual value.

If you would like to compare leasing a vehicle versus financing a vehicle, please visit the Car Lease Vs. Buy Calculator.

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Automobile Lease Calculator

Calculate monthly auto lease payment, as well as the total and per payment depreciation, leasing fee, and sales tax breakdown.

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Selected Data Record:

A Data Record is a set of calculator entries that are stored in your web browser's Local Storage. If a Data Record is currently selected in the "Data" tab, this line will list the name you gave to that data record. If no data record is selected, or you have no entries stored for this calculator, the line will display "None".

DataData recordData recordSelected data record: None
MSRPMSRPSticker price or MSRPSticker price or MSRP:

Sticker price or MSRP:

Enter the sticker price of the vehicle plus the cost of any additional options, but without the dollar sign or any commas. Note that MSRP stands for Manufacturer Suggested Retail Price and is usually displayed on the sticker attached to the new vehicle.

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Final priceNegotiated priceNegotiated price after incentivesNegotiated price after incentives:

Negotiated price after incentives:

Enter the agreed upon price after negotiation and after subtracting dealer incentives, but without the dollar sign or any commas. This figure is what is commonly referred to as the Net Capitalized Cost.

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Add'l costsAdd'l lease costsAdditional lease costs not paid upfrontAdditional lease costs not paid upfront:

Additional lease costs not paid upfront:

Enter any costs that are added to the lease (base cap cost) but that are not paid upfront, but without the dollar sign or any commas. These would include costs such as acquisition fee, insurance, luxury tax, amount still owed on trade-in, extended warranty, etc..

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Down pmtDown paymentDown paymentDown payment:

Down payment:

Enter the total of any down payment you plan to make, but without the dollar sign or any commas. If none, enter 0 or leave blank. Note that when you make a down payment on a lease you may need to pay sales tax on that amount upfront. This is because what you are really doing is pre-paying depreciation, which in most cases is taxable (varies from state to state).

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Trade creditTrade-in creditTrade-in creditTrade-in credit:

Trade-in credit:

Enter any credit you will receive for a vehicle trade-in, but without the dollar sign or any commas. If none, enter 0 or leave blank.

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Sales taxSales taxSales tax rateSales tax rate::

Sales tax:

Enter the total state and local tax rate that will apply to the lease. Enter as a percentage, but without the percent sign (for .06 or 6%, enter 6).

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MonthsMonthsLength of lease in monthsLength of lease in number of months:

Length of lease (months):

Enter the number of months you will be leasing the car for. Most leases are for 24, 36, or 48 months). Note that lease terms beyond 36 months tend to eliminate any benefits that might be gained from leasing instead of buying.

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Lease rateLease rateLease rateLease rate:

Lease rate:

If you know the money factor, click the Money factor option and enter the factor in the adjacent field. If you do not know the money factor, click the APR option and enter the new car lending rate in the adjacent field (enter as a percentage but without the percent sign). In the either case, the calculator will calculate the unknown rate for you and display it in corresponding field.

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Residual valueResidual valueResidual valueResidual value:

Residual value:

If you know the percentage the leasing company will use to determine the residual value (typically 50%-58% for a 36-month lease), click the Residual % option and enter the percentage in the adjacent field. If you do not know the residual percentage, click the Residual $ option and enter the anticipated dollar value of the car at the end of the lease in the adjacent field. In either the case the calculator will calculate the unknown value for you and display it in the corresponding field (as long as the MSRP field is filled in).

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Cap cost:Capitalized cost:Capitalized cost:Capitalized cost:

Capitalized cost

This is the total MSRP (Manufacturer Suggested Retail Price) as entered in the top portion of the automobile lease calculator.

Lease cost:Lease cost:Lease cost:Lease cost:

Lease cost:

This is the Lease Cost, which is the Capitalized Cost less any dealer incentives, negotiated price reductions, down payment, and trade-in value.

Resid value:Residual value:Residual value:Residual value:

Residual value:

This is the projected value of the car at the end of the lease. In other words, if you wish to purchase the car after the leasing term has expired, this is what you might expect to pay for it.

Mon deprec:Monthly deprec:Monthly depreciation fee:Monthly depreciation fee:

Monthly depreciation fee:

This is the total reduction in value divided by the number of months of the leasing term.

Mon lease:Monthly lease:Monthly lease fee:Monthly lease fee:

Monthly lease fee:

This is the portion of your monthly payment that will be paid to the leasing company. This is essentially the same thing as the interest charges you would pay to a finance company (bank) had you purchased the vehicle instead of leasing it.

BT lease pmt:BT lease payment:Before-tax monthly lease payment:Before-tax monthly lease payment:

Before-tax monthly lease payment:

This is the total of your monthly depreciation payment and your monthly leasing fee payment. Think of it as the Principal and Interest payment on an automobile loan.

Mon tax:Monthly tax:Monthly sales tax payment:Monthly sales tax payment:

Monthly sales tax payment:

This is your monthly lease payment multiplied by the total of your state and local sales tax rates. In most states you will need to pay sales tax on the amount of each of your monthly leasing payments (some states require all sales taxes be paid upfront). This basically means that you are paying sales taxes on the leasing fee (finance charges) -- which is not the case when you make a car loan payment.

Mon pmt:Monthly pmt:Monthly lease payment:Monthly lease payment:

Monthly lease payment:

This is the total of your monthly depreciation, leasing fee, and sales tax payments.

If you would like to save the current entries to the secure online database, tap or click on the Data tab, select "New Data Record", give the data record a name, then tap or click the Save button. To save changes to previously saved entries, simply tap the Save button. Please select and "Clear" any data records you no longer need.

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Help and Tools

Learn

How to calculate car lease payment and why an automobile lease is a loan in sheep's clothing.

How to Calculate Car Lease Payment

Here is how the car and truck lease payment calculator calculates the monthly lease payment, based on the following example variables and using the car lease calculator formula:

Vehicle Lease Example Variables
Sticker price:$25,000.00
Negotiated price after incentives:$24,000.00
Additional lease costs not paid upfront:$500.00
Down payment:$1,500.00
Trade-in credit:$2,000.00
Sales tax:7.875%
Length of lease in number of months:36
Money factor (interest rate / 2400):0.00250
Residual value rate:55.000%
  1. Calculate the Lease Cost, which is equal to the Negotiated Price plus the Additional Lease Costs, minus any Trade-In, minus any Down Payment ($24,000 + $500 - $2,000 - $1,500 = $21,000).
  2. Calculate the Residual Value, which is equal to the MSRP times the Residual Value Percentage ($25,000 x 0.55 = $13,750).
  3. Calculate the Monthly Depreciation Fee, which is equal to the Lease Cost minus the Residual Value, divided by the number of months (($21,000 - $13,750) / 36 = $201.39).
  4. Calculate the Monthly Lease Fee, which is equal to the Lease Cost plus the Residual Value, times the Money Factor (($21,000 + $13,750) x 0.00250 = $86.88).
  5. Calculate the Monthly Before-Tax Lease Payment, which is equal to the Monthly Depreciation Fee plus the Monthly Lease Fee ($201.39 + $86.88 = $288.27).
  6. Calculate the Monthly Sales Tax Payment, which is equal to the Monthly Before-Tax Lease Payment times the Sales Tax Rate ($288.27 x 0.7875 = $22.70).
  7. Calculate the Monthly Lease Payment, which is equal to the Before-Tax Lease Payment plus the Monthly Sales Tax Payment ($288.27 + $22.70 = $310.97)

Why a Lease is a Loan in Sheep's Clothing

Don't be fooled, a lease is just another type of loan.

After all, the only difference between a car loan and a car lease, is that in the former case you are borrowing cash (an asset) to buy the car, and in the latter case you are borrowing the value of the car (also an asset).

In both cases you will need to pay a rental fee on the asset you borrowed (interest charges on the cash borrowed or leasing fees on the car value borrowed).

And because a lease is a type of loan, the fact remains that whether you lease or buy, you will still be spending more to drive the car than you would have to if you had saved up and paid cash for the car.

The Most Costly Aspect of Leasing

Because you will be leasing a "new" car instead of purchasing a "used" car, you will suffer the same warp-speed depreciation that comes from buying new instead of used (see the Car Depreciation Calculator).

Buying or leasing a new car every 1-2 years is one of the fastest destroyers of potential future wealth ever known to humankind.

For these reasons, and because I see "borrowing value to be repaid with interest" as nothing more than a legal way for the super-wealthy to inconspicuously siphon money out of the pockets of average hard-working Joes and Janes, the only car acquisition method I recommend is to save up and pay cash for a used car.

I realize that because we weren't raised to grow slow and pay as we go, paying cash for a vehicle is probably not an option for you at this very moment -- thanks to all of the borrowing from tomorrow you've done in the past.

But that doesn't mean you should give up on the idea altogether.

How to Pay Cash for a Car

So how do you go from borrowing to acquire vehicles to paying cash for them so you can save thousands, even tens of thousands of dollars in finance charges and leasing fees throughout your lifetime?

Start small and work your way up.

The best way to get into the habit of paying cash for everything you buy is to start with small expenditures.

If you stop borrowing money to pay for all of the relatively small purchases that most people put on their credit cards, eventually you will rid yourself of monthly credit card payments.

Then, once you no longer have any credit card payments, you can then begin to redirect those payments into a "depreciation account."

What's a depreciation account? It's an account you use to pay cash to replace your assets as they wear out.

In other words, a depreciation account is where all of your monthly payments should be going.

In any case, as you form your habit of paying cash for everything you buy, and faithfully deposit the payment savings into your depreciation account, you will be able to make larger and larger down payments on your future car purchases.

Then, if you stay fully committed to paying cash for all of the small purchases, you will eventually be able to pay cash for a car.

But take it from me, you probably won't like the feeling you get when you hand a car dealer $25,000 in cash. And what should that suggest to you?

That's the feeling you need to feel when you part with that much of your hard-earned money!

Adjust Calculator Width:

Move the slider to left and right to adjust the calculator width. Note that the Help and Tools panel will be hidden when the calculator is too wide to fit both on the screen. Moving the slider to the left will bring the instructions and tools panel back into view.

Also note that some calculators will reformat to accommodate the screen size as you make the calculator wider or narrower. If the calculator is narrow, columns of entry rows will be converted to a vertical entry form, whereas a wider calculator will display columns of entry rows, and the entry fields will be smaller in size ... since they will not need to be "thumb friendly".

Show/Hide Popup Keypads:

Select Show or Hide to show or hide the popup keypad icons located next to numeric entry fields. These are generally only needed for mobile devices that don't have decimal points in their numeric keypads. So if you are on a desktop, you may find the calculator to be more user-friendly and less cluttered without them.

Stick/Unstick Tools:

Select Stick or Unstick to stick or unstick the help and tools panel. Selecting "Stick" will keep the panel in view while scrolling the calculator vertically. If you find that annoying, select "Unstick" to keep the panel in a stationary position.

If the tools panel becomes "Unstuck" on its own, try clicking "Unstick" and then "Stick" to re-stick the panel.