Frequently Asked Questions

It is the lease version of an interest rate, written as a small decimal such as 0.00125. Multiply it by 2,400 to get an equivalent annual rate for comparison (0.00125 × 2,400 = 3.00%). It is not an APR, and federal rules say a lease rate may not measure the overall cost of the lease. See our money factor guide.

The leasing company's estimate of what the car will be worth at the end of the term, normally stated as a percent of MSRP. You usually cannot negotiate it, but a higher residual means less depreciation to pay for, so it lowers the payment.

The gross capitalized cost is the price you agree on plus any fees rolled into the lease. Subtract your capitalized cost reduction (down payment, trade-in credit and rebates) to get the adjusted capitalized cost, which is the amount the payment formula uses.

Yes. The selling price sets the capitalized cost, which drives both the depreciation charge and the rent charge. Negotiating the price directly is usually clearer than negotiating only the monthly payment.

Yes, it reduces the capitalized cost. But the Federal Reserve notes a capitalized cost reduction is not refundable, so it is at risk if the car is stolen or totaled early. Whether to put money down is your decision; check how it compares with a slightly higher payment.

An acquisition fee covers the cost of setting up the lease and is paid up front or rolled into the cap cost. A disposition fee may be charged when you return the car. Amounts vary by lessor, so check your contract. The calculator has a field for fees rolled into the cap cost.

Check your contract. The charge per mile is written there, and we do not publish a typical figure because it differs by lessor. The FTC says the annual limit in most standard leases is 15,000 miles or less, and you will probably be charged a fee for going over.

The contract defines it. The lessee pays for excess wear, damage and missing equipment, and the leasing company generally decides what is excessive, so read the standard before you sign and photograph the car when you return it.

Many leases include a purchase option, but not all. If yours does, the contract gives the price or how it is set, and when you can use it. Compare the price with the car's market value at that time.

Often yes, but it may be costly. The Federal Reserve explains the charge is typically the lease payoff minus the vehicle's credit and may include fees and taxes. The earlier you end it, the greater the charge is likely to be. The contract must explain the conditions and how the charge is calculated.

It depends on the state. Some tax each monthly payment, others tax the price or the up-front payments, and some do it differently by city. This calculator applies one rate to the monthly payment. Check your state's rule or ask the dealer to show how the tax is computed.

The usual reasons are fees rolled into the cap cost, a different money factor or residual than you entered, a different tax method, rounding, or a different treatment of the first payment. Ask the dealer for the line-by-line derivation; federal rules require the lease disclosure to show how the payment is calculated.

Leasing usually has a lower monthly payment, according to both the FTC and the CFPB, but you do not own the car at the end. Whether it is cheaper over time depends on how long you keep cars, how much you drive and the prices involved. See our lease vs. buy guide.

No. The calculation runs in your browser and the numbers you type are not sent to us or saved. Closing the page clears them. See our privacy policy for what the site itself may collect.

They are round examples to show how the formula works, not a real offer or a current manufacturer program. Replace them with the numbers from a real worksheet.

No. It is an estimate for planning. Only a written offer from a dealer or lessor, with the required disclosure, is an offer.