Estimate a monthly car lease payment from the vehicle price, money factor, and residual value — and see how it compares to buying the same car.
Every lease payment bundles two separate charges. The depreciation portion covers the value the car is expected to lose over the lease — the gap between its price today and its residual value when you hand it back. The interest portion (called "rent charge" in leasing terms) is the lessor's fee for letting you use their asset, calculated using the money factor instead of a normal interest rate.
A money factor is just an interest rate wearing a different costume — multiply it by 2,400 and you get the roughly equivalent APR. Dealers sometimes quote money factors specifically because a number like 0.00208 sounds smaller and less alarming than "4.99% APR," even though they represent the same cost.
This calculator's purchase comparison assumes identical price, rate, term, and tax treatment for both paths — useful for isolating the leasing-vs-financing math itself. In the real world, leases often carry extra fees (acquisition, disposition, mileage penalties) that purchases don't, and the comparison also ignores that buying leaves you owning an asset outright at the end, while leasing leaves you with nothing unless you exercise a purchase option.
Many states tax each lease payment as it's made (including the down payment, treated as an upfront payment) rather than taxing the full vehicle price upfront the way a purchase is taxed — this calculator models both mechanisms separately.
All else equal, yes — but the residual value and the negotiated price matter just as much. A great money factor on an inflated price, or a low residual that overstates depreciation, can still add up to an expensive lease.
Most leases include a purchase option letting you buy the car for its residual value (plus tax) at lease-end — which is exactly the assumption behind this calculator's "Total Cost to Own After Lease Ends" figure.
Pick another financial tool to jump straight to it.