What is the money factor in a car lease?

The money factor is the interest rate expressed in lease terms. It is equivalent to APR divided by 2400. For example, a money factor of 0.00125 equals an APR of 3% (0.00125 × 2400 = 3). Dealers sometimes quote the APR directly — divide it by 2400 to get the money factor.

What is residual value and how does it affect my payment?

Residual value is the manufacturer's estimate of the car's worth at the end of the lease term. A higher residual value means you are financing less depreciation, which lowers your monthly payment. Residual values are typically expressed as a percentage of MSRP (e.g., 55% for 36 months).

What is the capitalized cost in a lease?

The capitalized cost (cap cost) is the effective price of the vehicle being financed in the lease. It equals the negotiated selling price plus any rolled-in fees, minus the down payment and trade-in value. Lowering the cap cost directly reduces your monthly payment.

Should I put money down on a lease?

A down payment on a lease reduces the cap cost and therefore lowers monthly payments, but you lose that money if the car is totaled or stolen. Many financial advisors recommend keeping down payments on leases small (or zero) and instead using that cash for other investments.

How is the monthly lease payment calculated?

The monthly base payment has two components: the depreciation fee ((cap cost − residual) ÷ term) and the finance charge ((cap cost + residual) × money factor). These are added together and then multiplied by (1 + tax rate) to get the total monthly payment.

What is the difference between MSRP and selling price in a lease?

MSRP is the manufacturer's suggested retail price (sticker price). The selling price is the amount you negotiate with the dealer. Negotiating the selling price below MSRP directly reduces your monthly payment, unlike buying where dealers sometimes focus only on the monthly payment figure.

Car Lease Monthly Payment Calculator

Name: Car Lease Monthly Payment Calculator
Availability: InStock
Author: Nham Vu

Enter the vehicle price, residual value, money factor, and lease term to instantly calculate your monthly car lease payment.

Lease Details

Vehicle Price (MSRP / Negotiated)

Down Payment

Trade-In Value

Fees Rolled Into Lease (acquisition, dealer, etc.)

Residual Value

Money Factor

Typical range: 0.0008 – 0.0030 | APR = MF × 2400

Lease Term

months

Sales Tax Rate (on monthly payment)

Enter lease details on the left and click Calculate.

Estimated Monthly Payment

$0.00

includes tax

Depreciation Fee

$0.00

per month

Finance Charge

$0.00

per month

Monthly Tax

$0.00

Lease Summary

Vehicle Price	—
Down Payment + Trade-In	—
Fees Rolled In	—
Adjusted Cap Cost	—
Residual Value	—
Total Depreciation	—
Money Factor	—
Equivalent APR	—
Lease Term	—
Total of Monthly Payments	—
Total Cost of Lease	—
Monthly Payment (with tax)	—

Summary

Enter the vehicle price, residual value, money factor, and lease term to instantly calculate your monthly car lease payment.

How it works

Enter the vehicle's MSRP (sticker price) or negotiated selling price.
Enter the down payment, trade-in value, and any fees rolled into the lease.
Enter the residual value (the car's estimated worth at lease end) as a dollar amount or percentage of MSRP.
Enter the money factor provided by the dealer (divide APR by 2400 to convert).
Set the lease term in months and your local sales tax rate.
Click Calculate to see your monthly payment broken down into depreciation fee and finance charge.

Use cases

Comparing lease quotes from multiple dealerships side by side.
Verifying a dealer's quoted monthly payment before signing.
Finding the break-even between leasing and buying a vehicle.
Estimating how a larger down payment affects your monthly lease cost.
Checking how changes in residual value affect the payment.
Understanding the impact of the money factor (interest rate) on total lease cost.

Frequently Asked Questions

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Last updated: 2026-05-23 · Reviewed by Nham Vu