Auto Lease Calculator — depreciation, rent charge & payment

How it works

Depreciation first: D = (C − R) ÷ n, where C is the adjusted capitalized cost (the negotiated figure after trade-in, down payment, or rebate), R the residual value the lessor sets, and n the months. CFPB's example runs it plainly: $20,000 − $8,000 leaves $12,000 of depreciation, and $12,000 ÷ 36 is $333 a month. The rent charge is the financing side: F = money factor × (C + R) — the Federal Reserve's guide works .00354 × ($18,800 + $12,350) = $110.27. The money factor is entered exactly as the lease quotes it, a decimal like 0.00125; the Fed cautions that it is not a lease rate and cannot be converted to one by moving the decimal point, so this page reports it as quoted rather than dressing it as an APR. Payment = depreciation + rent charge + monthly taxes.

Worked example

Both steps rest on published cases. The Federal Reserve resolves the rent charge: a .00354 money factor on an $18,800 capitalized cost with a $12,350 residual gives .00354 × $31,150 = $110.27 a month. CFPB resolves the depreciation: $20,000 − $8,000 = $12,000, and $12,000 ÷ 36 months = $333. On this page's default vehicle — $30,000 capitalized cost, $18,000 residual, 0.0025 money factor, 36 months — the same two steps give about $333 of depreciation and $120 of rent charge, roughly $453 a month, this calculator's own composition of the published arithmetic.

Frequently asked questions

What is the capitalized cost?

The lease's price of the car: the negotiated value after subtracting any trade-in, down payment, or rebate — which is why it is called the adjusted capitalized cost. Every dollar negotiated off it reduces both the depreciation and the rent charge, since it enters both formulas.

What is the residual value?

The lessor's prediction of the car's worth at lease end, set by the leasing company up front. A higher residual means less depreciation to pay for — but it also raises the buyout price if you keep the car, and it is the lessor's number, not a market guarantee.

What is the money factor, really?

The decimal the lease uses to price its financing — multiplied by the sum of the capitalized cost and residual to give the monthly rent charge. The Federal Reserve's guide is explicit that it is not a lease rate and cannot be converted to one by moving the decimal point; compare offers by their money factors directly, smaller being cheaper, all else equal.

Why does the payment include the residual in the rent charge?

Because during the lease the lessor has capital tied up in the whole car — the part you are consuming and the part returning to them. The rent charge prices that average exposure, which is why C + R appears rather than the depreciation alone.

Does a longer term always mean a cheaper payment?

In the sweep, yes — the same depreciation spreads over more months while the rent charge holds. But the sweep holds the residual constant, and a real lessor quotes a lower residual on a longer term (more depreciation to pay), so treat the long-term rows as a floor, not a quote.

How is leasing different from buying with a loan?

A loan buys the whole car and builds equity; a lease pays for the predicted depreciation plus financing, returns the car, and builds none. The payment is lower for the same vehicle, and at the end you own nothing — the auto-loan calculator prices the ownership path for comparison.

How accurate is this, and what does it exclude?

The two formulas are the contract's own arithmetic, exact for the inputs quoted. It excludes the up-front amounts due at signing, disposition and excess-mileage fees, and gap insurance; taxes vary by state, which is why they are a dollar field. Confirm every input against the lease worksheet — the money factor especially, since it is often not volunteered.