Auto Lease Calculator

Use free auto lease calculator to estimate 2025 monthly payments accurately. Compare leasing vs buying, factor in money factor, residual value, taxes & down payment. Get instant results for smart car leasing decisions.

Estimate Your Monthly Payments and Compare Leasing vs Buying

Should You Forget Leasing Your Next Car and Buy? Use Our 2025 Calculator to Decide.

Honestly speaking, the prices of cars have not been very friendly in the recent past. Having a new ride averaging between $50,000 in 2025, it is no wonder that so many are considering leasing a cheaper option to be behind the wheel. It is an excellent method to maintain your monthly expenses low and upgrade to a new model after every few years, but it is not always the best choice for everyone.

The ultimate question is: What is the reality of the math as far as you are concerned?

This is precisely the reason why we created our Auto Lease Calculator. You can do the calculations yourself rather than make a guess or wait until a salesperson provides you with a quote. You are allowed to input such items as taxes, the amount of your down payment, and the value of your trade-in so that you can see what your check will actually look like each month. Above all, it allows you to place leasing and buying next to each other so that you can see which of them can save you money in the long run.

You are considering a trustworthy SUV to take the family, or it is time to take the leap to an EV. We are the ones who will make you understand the fine details. We will dissect the way these payments are calculated in real life, and we will make your choice on which way is more appropriate for your budget.

What Is Car Leasing and Why Is It So Popular

Consider leasing to be a car rental agreement or a car subscription. You are only paying for the number of years you utilize the vehicle, rather than paying to own the entire car, which is normally two to four years. You simply hand in the keys at the expire of the term and walk away (or purchase it in case you have really fallen in love).

Why it is a favorite:
Keep More Cash in Your Pocket: Since car prices are where they are today, the lease payment (average of $596-659) is much easier on the pocket as compared to a loan payment, which is nearer to $748.

The New Car Smell, Forever: You upgrade every few years. That is a guarantee that you will never miss out on the newest safety technology and the highest quality infotainment screens.

No Repair Headaches: Because the car is new, it is under warranty throughout the entire ownership period. When something is broken, it is not your fault, especially the manufacturer's.

Low Start-up Costs: It is easy to drive off the lot using very little (or even no) cash down.

The Snare: There is such a thing as rules of Leasing. There will be a limit on the number of miles it can cover (normally 10000 to 15000 miles per year), and the dealership will require the vehicle to be in good condition by the end of the year. In case you are likely to receive door dents or make long journeys, then purchasing would be the best option.

How Auto Lease Payments Are Calculated

Lease math can feel like a mystery, but it's actually pretty logical once you break it down. Instead of paying for the whole car, you're only paying for the "slice" of the car's life that you're actually using.
Here is the "ingredients list" for your monthly bill:
The "Price Tag" (Cap Cost): This is the final price you negotiated for the car, minus any cash you put down or your trade-in.
The "Leftover Value" (Residual Value): This is the bank's best guess at what the car will be worth in three years. If a car holds its value well, your payments will actually be lower!
The "Value Loss" (Depreciation): This is the biggest part of your bill. You're simply paying the difference between the price today and the value in the future.
The "Money Factor": This is just "Lease-Speak" for interest.
Quick Tip: Multiply this tiny decimal by 2,400 to see the actual APR.
The "Pay-As-You-Go" Tax: Unlike buying, where you often pay all the sales tax upfront, leasing lets you spread it out over your monthly payments.

How the Auto Lease Calculator Computes Monthly Lease Payments

Step A: Calculate Monthly Depreciation
This is the biggest portion of your payment - you're essentially paying for the car's expected loss in value during the lease.
Formula:
Monthly Depreciation = (Net Capitalized Cost - Residual Value) ÷ Lease Term (in months)
Example (using common defaults: $50,000 auto price, $10,000 down, $0 trade-in, $24,000 residual, 36 months):
Net Cap Cost = $50,000 - $10,000 = $40,000
Depreciation = ($40,000 - $24,000) ÷ 36 = $16,000 ÷ 36 = $444.44 per month

Step B: Calculate Monthly Interest (Rent Charge)
Unlike a loan (where interest is on the declining balance), lease interest is calculated on the average of the cap cost and residual value.

Formula:
Monthly Rent Charge = (Net Capitalized Cost + Residual Value) × Money Factor
Example (money factor = 0.00208, which is = 5% APR):
($40,000 + $24,000) × 0.00208 = $64,000 × 0.00208 = $133.12 per month

Step C: Calculate Monthly Sales Tax
Most states tax only the monthly payment amount (depreciation + interest), not the full vehicle price upfront.

Formula:
Monthly Tax = (Monthly Depreciation + Monthly Rent Charge) × Tax Rate
Example (7% tax rate):
($444.44 + $133.12) × 0.07 = $577.56 × 0.07 = $40.43 per month
Step D: Total Monthly Lease Payment
Add everything together:
Monthly Payment = Monthly Depreciation + Monthly Rent Charge + Monthly Tax
Example total: $444.44 + $133.12 + $40.43 = $617.99