US Car Lease Calculator: Payment, Money Factor, Lease vs Buy

US car lease payment: money factor, residual and sales tax

A US lease payment adds depreciation ((net capitalized cost − residual value) / term) and the rent charge ((net capitalized cost + residual) × money factor), then sales tax. A money factor of 0.0025 equals a 6% annual rate. With the default values, the tool finds $459.32 a month over 36 months. The page also converts a money factor to an APR and back, finds the money factor of an offer, and runs a lease vs finance comparison over 2 to 10 years.

Calculation steps

1. Residual value = sticker price (MSRP) × residual %.
2. Net capitalized cost = negotiated price + acquisition fee − (down payment + trade-in + rebates).
3. Monthly depreciation = (net cost − residual) / term.
4. Rent charge = (net cost + residual) × money factor; equivalent rate = money factor × 2,400.
5. Payment = (depreciation + rent charge) × (1 + sales tax).

Default example

MSRP $38,000, negotiated price $35,500, acquisition fee $695, $3,000 down, $1,000 rebate, 36 months, 57% residual, money factor 0.0025, 7.5% tax. Residual: $21,660; net cost: $32,195; depreciation: $292.64; rent charge: $134.64; tax: $32.05. Payment: $459.32. Due at signing: down payment + first payment = $3,459, since the acquisition fee is already included in the capitalized cost. Total cost shown: $19,931 (payments, down payment and a $395 disposition fee; the rebate, already deducted from the capitalized cost, is not an expense).

Comparison with buying

The loan covers the negotiated price plus tax, minus down payment, trade-in and rebates: $34,162.50 at 6.5% over 60 months, or $668.43 a month. After 36 months, $15,005 is still owed on a car valued at its residual, leaving $6,655 of equity.

Money factor and APR

The equivalent APR is the money factor × 2,400, and the money factor is the APR ÷ 2,400: 0.0025 gives 6.00%, and 5% gives 0.00208. The converter at the top of the page drives the payment calculation. To find the money factor of an offer, divide the monthly rent charge by the sum of the adjusted capitalized cost and the residual value. With the default deal, a total rent charge of $4,847 over 36 months on $32,195 + $21,660 gives 4,847 ÷ 36 ÷ 53,855 = 0.00250. From a pre-tax payment of $427.28, subtract the monthly depreciation ((32,195 − 21,660) ÷ 36 = $292.64) and divide the remaining $134.64 by $53,855: 0.00250 again. Under Regulation M (12 CFR 1013.4(f), as in force in 2026), a US vehicle lease must show the adjusted capitalized cost, the residual value and the rent charge.

The money factor chart runs from 0.0010 (2.40%) to 0.0040 (9.60%) with the payment of the lease entered: $372 at 0.0010, $459 at 0.0025 and $546 at 0.0040 with the default values.

Lease vs finance over several years

On the lease side, the same lease is signed again each time it ends: payments, a down payment at each signing and a disposition fee at each return, plus excess mileage ((miles driven − allowance) × fee per mile). On the finance side, the tool adds the down payment and the loan payments, then subtracts the car's value minus the loan balance still owed. That value follows the residual curve: MSRP × residual^(months ÷ lease term), so $21,660 after 36 months and $12,346 after 6 years with the default values.

Over 6 years (the default), leasing costs $39,861 (two 36-month leases) and buying costs $30,760 ($43,106 paid, loan repaid, car worth an estimated $12,346): buying saves $9,102. Over 3 years, leasing costs $19,931 against $20,409 for buying, $478 less. With a $0.25 fee per mile above a 12,000-mile yearly allowance, the break-even is 12,637 miles a year: at 15,000 miles a year the lease reaches $22,181 and buying becomes $1,772 cheaper.

Limits

Tax is always applied to each monthly payment, although some states collect it upfront. The 1% rule is not evaluated. In the multi-year comparison, the owned car's value does not drop with mileage, maintenance and insurance are left out, and a lease still running at the end of the period counts only the payments already made. For a euro lease (LOA, LLD), the car loan vs lease comparison is a better fit. This is an estimate and does not replace the dealer's contract.

Frequently Asked Questions

How do I convert a money factor into an interest rate?

Multiply it by 2,400: a money factor of 0.0025 equals 6% a year, 0.00125 equals 3%. In the default example, going from 0.0025 to 0.00125 lowers the payment from $459.32 to $386.95.

What does a 57% residual mean?

It is the value the lessor expects the car to have at lease end, as a share of the sticker price: 57% of $38,000 is $21,660. The higher the residual, the lower the depreciation you pay each month.

How much do I pay at lease signing?

The tool adds the down payment and the first payment: 3,000 + 459.32 = $3,459 with the default values. The acquisition fee is built into the capitalized cost and paid through the monthly payments. Registration and dealer fees are not included.

Does my lease pass the 1% rule?

This rule of thumb wants a pre-tax payment of at most 1% of the sticker price. At $427.28 before tax on a $38,000 car (threshold $380), the default example fails it; the tool does not run this check for you.

How do I find the money factor of a lease offer?

Take the rent charge, the adjusted capitalized cost and the residual value from the contract: Regulation M requires all three. Money factor = total rent charge ÷ term ÷ (capitalized cost + residual). For $4,847 over 36 months with $32,195 + $21,660, that is 0.00250, or 6.00%. From a pre-tax payment, first subtract the monthly depreciation: (427.28 − 292.64) ÷ 53,855 = 0.00250.

What is a dealer money factor markup?

The leasing company sets a base money factor (the buy rate) for your credit tier. The dealer can quote you a higher one, and the difference (the markup) pays the dealer. On the default example, a 0.0004 markup (0.0025 to 0.0029, or 6.96%) adds $23.16 a month with tax, $833.68 over 36 months. Ask for the buy rate and check the money factor of the offer with the module at the top of the page.

What money factor can I get with my credit score?

Leasing companies sort customers into credit tiers and set a money factor for each tier; the best tier gets the lowest one. We found no official, dated source for typical money factors by score, so the tool gives none. Ask the dealer for your tier and its buy rate. On the default example, each extra 0.0001 adds $5.39 a month before tax ($5.79 with 7.5% tax).

Is it cheaper to lease or finance a car?

It mostly depends on how long you keep the car. With the default values, leasing costs $19,931 over 3 years against $20,409 for buying (after deducting the car's $21,660 value), $478 less. Over 6 years, two leases cost $39,861 and buying $30,760: buying saves $9,102. Driving past the allowance changes the result: over 3 years the break-even is 12,637 miles a year with a $0.25 fee per mile.

Is this tool really free?

Yes, all tools on Kristools are 100% free and accessible without registration.

Is my data protected?

Yes. All processing is performed directly and securely inside your browser. No personal data is sent to our servers.