Car lease calculator

A lease is like a long-term rental. You pay to drive a new car for a set time (often 2 to 4 years), then return it. You are mostly paying for how much value the car loses while you drive it, plus finance costs and tax; not for the whole car like a loan.

At the end you usually give the car back. Some leases let you buy it for a set price. Mileage limits and wear rules apply, so check those with the dealer before you sign.

It follows the same basic steps most lease estimates use:

1. Start with the car's MSRP (the sticker price). 2. Subtract the residual value (what the car should still be worth when the lease ends). 3. Subtract any down payment and trade-in. What is left is the "amount borrowed," meaning the value you are paying down over the lease. 4. Divide that by the number of months. That is your base monthly payment. 5. Add estimated finance fees from the interest rate (APR). 6. Add estimated sales tax on the base payment plus fees.

Those three pieces (base + fees + tax) add up to the estimated monthly payment. The number is for learning and planning. A dealer quote can be different because manufacturers set their own residuals and lease rates.

Residual percentage is a guess about how much of the car's MSRP will still be left when the lease ends. Think of it as: "What share of the sticker price should this car still be worth after I drive it for a few years?"

Example: If MSRP is $40,000 and the residual is 55%, the residual value is about $22,000. You are mainly paying for the other $18,000 of value loss over the lease (before down payment, trade-in, fees, and tax).

A higher residual usually means a lower monthly payment, because less value is expected to wear off during your lease. A lower residual usually means a higher payment. Real residual percentages come from the manufacturer or leasing company and can change by model, trim, and month. The defaults here are educational estimates only.

On a lease, "amount borrowed" is not a normal bank loan. It is shorthand for the part of the car's value you are paying for during the lease: sticker price minus residual value, minus down payment, minus trade-in.

You are not buying that whole amount the way you would with a purchase loan. You are covering the drop in value while you use the car. That is why leases often have lower monthly payments than buying, and why you usually return the car at the end.

In this calculator, "estimated monthly fees" stand in for the finance charge on the lease; the cost of borrowing over time, based on the interest rate (APR) you enter.

We convert APR into the industry money factor (APR ÷ 2400) and apply it the way lease math usually does. That keeps the estimate realistic without asking you to enter a money factor yourself.

Real leases can also include other fees (acquisition, disposition, documentation, registration). Those vary by dealer and state, so they may not match this estimate. Always ask the dealer for a full fee list.

Due at signing is the cash you typically need on day one to pick up the car. In this estimate it is: your down payment + the first monthly payment + the estimated monthly finance fees.

Dealers may add title, registration, or other fees. Some offers advertise "$0 due at signing," which usually means those costs are rolled into the lease or covered another way; ask what is included before you agree.

Both lower the amount borrowed. A larger down payment or a higher trade-in value usually means a lower monthly payment and often a lower due-at-signing total for the cash you bring.

Putting more money down can help if you want a lower payment, but remember: on a lease that cash is mostly paying for use of the car, not building equity the way a purchase down payment can. If you are unsure how much to put down, start at $0 in the calculator and raise it until the monthly payment fits your budget.

No. This is an educational estimate only. It is not a credit offer, approval, or a quote from a manufacturer or dealer.

Car brands do not publish their official residual values and lease rates in a free public API. So we use typical residual defaults by term length and a finance fee based on national average new-car APRs. Your dealer's real program for a specific VIN can be better or worse.

Use this tool to learn the math and ballpark a budget, then confirm current lease specials with a dealer.