Estimate your monthly car lease payment from the price, residual value, money factor and term.
Estimates only.
A lease payment has two parts: depreciation (the value the car loses while you drive it) and a finance charge (the cost of borrowing). We add sales tax on top.
The residual value is what the car is worth at lease end (often 50 to 60 percent of price for a 36 month lease). A higher residual and a lower money factor both lower your payment.
A lease payment is monthly depreciation plus a finance charge, plus tax. Depreciation is the cap cost minus any down payment minus the residual value, divided by the term. The finance charge is the adjusted cap cost plus residual, times the money factor (APR divided by 2400).
The money factor is the lease equivalent of an interest rate. Multiply it by 2400 to get the approximate APR, so a money factor of 0.00208 is about 5 percent. A lower money factor means a cheaper lease.
Residual value is the car's predicted worth at the end of the lease. A higher residual means the car depreciates less while you have it, which lowers your monthly payment.
A down payment lowers the monthly payment but is generally not recommended, because if the car is totaled or stolen early you can lose that money. Many people put little or nothing down and accept a slightly higher payment.