How to use it
- Enter Vehicle price.
- Enter Residual value %.
- Enter APR %.
- Enter Term (months).
The formula
Payment = depreciation ÷ months + (cap + residual) × money factor.
Worked example
About this calculator
A lease payment has two parts: depreciation (the slice of the car's value you use up) and a finance charge on the money tied up in the vehicle. That's why a car that holds its value leases cheaply while a fast-depreciating one is expensive to lease even at the same price.
Dealers quote leases as a monthly number, which hides the components. Recomputing the payment yourself with this tool — and asking the dealer for the residual and money factor — is the single best defence against overpriced lease offers.
Frequently asked questions
What is residual value?
The predicted value of the car at lease end, set by the leasing company. Higher residual = lower payment.
What is a money factor?
The lease industry's way of writing interest: APR ÷ 2400. We convert your APR automatically.
Lease or buy?
Leasing buys the car's depreciation years; buying builds ownership. Compare this payment with a loan payment on the same car.
Tips
- A shorter term costs less overall even if the payment is higher.
- Check the APR, not just the rate, to compare fairly.
- Read the fine print for fees and prepayment penalties.
Key terms
- APR
- Yearly cost including fees, as a percentage.
- Term
- How long you repay the loan.
- Collateral
- An asset securing the loan.