Auto Lease Payment Calculator
Auto Leasing Guide: How to Get the Best Deal
Understanding Lease Payments
Your lease payment consists of three main components:
- Depreciation: The vehicle's value loss during your lease (60-70% of payment)
- Interest: Cost of borrowing (determined by money factor, 20-30% of payment)
- Taxes/Fees: Sales tax and acquisition fees (10-15% of payment)
Key Lease Terms Explained
Money Factor
This is essentially your interest rate. Multiply by 2400 to get approximate APR (0.0015 = 3.6% APR).
Residual Value
The car's projected value at lease end. Higher residual = lower payments.
5 Tips for Better Lease Deals
- Negotiate the selling price first - Just like buying, you can negotiate the vehicle price before discussing lease terms
- Ask for the money factor - Dealers can mark this up for extra profit
- Consider multiple lease terms - 36 months often has the best residual values
- Put down as little as possible - Large down payments don't lower your interest costs
- Watch mileage limits - Going over can cost $0.15-$0.30 per extra mile
Pro Tip: The best time to lease is at the end of the month/quarter when dealers are trying to meet sales targets. You'll often get better money factors and incentives.
Lease vs. Buy: Which is Right For You?
| Consideration | Leasing | Buying |
|---|---|---|
| Monthly Payment | Lower | Higher |
| Long-term Cost | Higher (perpetual payments) | Lower (you eventually own) |
| Vehicle Ownership | No equity | Build equity |
| Best For | Those who want new cars every 2-3 years | Those who keep cars long-term |