Using the Lease Calculator
A lease pays for the use and financing of an asset over a defined period. Its residual value reduces the depreciation component, but that does not mean you own the asset for that residual amount without following the contract’s terms.
Worked example
Use the example inputs below to reproduce this result. These are the form's starting values, not recommended targets. Changing your inputs updates your result above; this worked example stays fixed for comparison. Results are rounded for display.
Example inputs
- Capitalized cost
- 30000
- Residual value
- 18000
- Lease months
- 36
- Money factor
- 0.002
- Payment sales tax (%)
- 0
Example result
- Base monthly payment
- 429.33
- Monthly with tax
- 429.33
Method and assumptions
Payment = (capitalized cost − residual)/months + (capitalized cost + residual) × money factor. Fees must be included in capitalized cost.
Compare the agreement over its full term
A lease payment is only one part of an agreement. Compare the upfront amount, recurring payments and any end-of-term obligations on the same basis. Keep a refundable deposit distinct from a fee or a payment that reduces the financed amount. Mileage limits, purchase options and other contract terms may matter even when they are not modeled here.
Common question
Can I include an upfront fee?
If the fee is financed in the lease, include it in capitalized cost. A fee paid separately upfront should be added separately when comparing total lease cost.
Guide updated .