Leasing is really two payments in one
Every lease payment blends a depreciation fee — the drop in value you're paying for — and a rent charge, the finance company's cut for letting you use their car. Weighing this against buying? See the Car Loan Calculator for the ownership path, or the Car Cost of Ownership Calculator for the full multi-year picture.
Frequently asked questions
What is a money factor?
A money factor is the lease equivalent of an interest rate, usually shown as a small decimal like 0.00125. Multiply it by 2400 to get the roughly equivalent APR — 0.00125 × 2400 = 3%.
What is residual value?
The value the leasing company expects the car to be worth at the end of the lease. A higher residual value usually means a lower monthly payment, since you're only paying for the depreciation down to that point.
Why does the monthly payment include tax?
Many states tax each monthly lease payment rather than the full vehicle price up front. This calculator applies your sales tax rate to the base payment — check your state's rule, since a few tax the full price at signing instead.
Last updated: June 2026