Finance & Business
Auto Lease Calculator
Calculate your monthly car lease payments and analyze total leasing costs
Enter values to calculate lease payments
Related to Auto Lease Calculator
The auto lease calculator helps determine your monthly payments and total costs for leasing a vehicle. It uses a comprehensive formula that considers the vehicle price, down payment, lease term, residual value, interest rate, and annual mileage allowance to calculate accurate lease payments and analyze the total financial impact of your car lease agreement.
Key Components of Auto Lease Calculation
The calculator breaks down the lease payment into two main components: depreciation charge and finance charge. The depreciation charge accounts for the vehicle's value loss over the lease term, while the finance charge covers the interest cost of financing the vehicle. The calculator also factors in your annual mileage allowance to determine the cost per mile.
The monthly lease payment calculation involves determining the net capitalized cost (vehicle price minus down payment), calculating the monthly depreciation based on the residual value, and adding the monthly finance charge based on the interest rate. The calculator also tracks the remaining balance throughout the lease term and provides a visual representation through a graph.
The calculator provides several key metrics to help you understand the full cost of your car lease agreement and make informed decisions. The results include the monthly payment amount, total cost of the lease, total interest paid, and cost per mile over the lease term.
Monthly Payment
This is your regular monthly lease payment, combining both the depreciation charge and finance charge. This amount remains constant throughout the lease term and represents your primary financial obligation.
Total Lease Cost
The total cost shows the complete financial commitment, including all monthly payments and the initial down payment. This helps you understand the full cost of leasing compared to the vehicle's purchase price.
Cost Per Mile
This metric shows how much you're paying per mile based on your annual mileage allowance. It's particularly useful for comparing different lease offers and understanding the true cost of your vehicle usage.
1. What is residual value in a car lease?
Residual value is the estimated value of the vehicle at the end of the lease term. It's predetermined at the start of the lease and affects your monthly payments - a higher residual value typically results in lower monthly payments because you're essentially paying for the difference between the initial value and the residual value. Luxury vehicles often have higher residual values due to their better value retention.
2. How does mileage allowance affect lease costs?
The annual mileage allowance affects both your monthly payments and the vehicle's residual value. Higher mileage allowances typically result in higher monthly payments because the vehicle will depreciate more over the lease term. If you exceed your mileage allowance, you'll usually have to pay an excess mileage fee at the end of the lease.
3. Should I make a larger down payment on a car lease?
A larger down payment reduces your monthly payments by lowering the net capitalized cost of the lease. However, unlike a car loan where a down payment builds equity, in a lease, you're not building ownership. Therefore, it's often recommended to make a smaller down payment and keep more money available for other investments or emergencies.
4. What happens at the end of a car lease?
At the end of the lease, you typically have three options: return the vehicle and lease a new one, purchase the vehicle for the predetermined residual value, or walk away. If you've exceeded the mileage allowance or there's excessive wear and tear, you may need to pay additional fees. Some leases also offer the option to extend the lease for a short period.
5. What is the scientific source for this calculator?
This calculator implements standard automotive lease calculation methodologies based on guidelines from the National Automobile Dealers Association (NADA) and the Consumer Leasing Act (Regulation M). The calculation formulas follow established financial principles for vehicle leasing, incorporating depreciation and money factor calculations as outlined in automotive finance textbooks and industry standards. The methodology is consistent with the Vehicle Lease Guide published by the Federal Reserve Board and the Financial Accounting Standards Board's ASC 842 Lease Accounting Standards, specifically their application to vehicle leases.