Lease Calculator

Depreciation charge. This is the largest component of your monthly payment. It represents the difference between the negotiated vehicle price (capitalized cost) and the residual value at lease end, divided by the number of months in your lease term. A higher residual value or a lower negotiated price will reduce your depreciation charge and lower your monthly payment.

Finance charge. Similar to interest on a loan, the finance charge is calculated by adding the negotiated price and the residual value together, then multiplying by the money factor. The money factor is a small decimal number that represents the interest rate — multiply it by 2,400 to convert to an approximate APR. A lower money factor means you pay less in financing costs over the life of the lease.

Residual value. This is the estimated value of the vehicle at the end of the lease term, expressed as a percentage of the MSRP. It is set by the leasing company and varies by vehicle make, model, trim, and lease term. Vehicles that hold their value well will have higher residual percentages, which directly lowers your monthly payment since you are only paying for the portion of value the car loses during your lease.