Car Lease Payment Calculator
Enter the vehicle price, down payment, residual value rate, interest rate, and lease term to calculate your monthly lease payment, total payment, and total interest.
What this car lease calculator works out
Give it five figures — vehicle price, down payment, residual value ratio, interest rate and lease term — and this tool simulates the monthly lease payment and the total you will pay over the contract. Leasing differs from buying because you do not have to put up the full price of the car: you pay off only the part above the residual value, the amount the vehicle is expected to be worth when the contract ends. That is why the monthly figure is arrived at differently from an ordinary car loan.
Here the residual value is deducted first, interest is applied to what remains, and the monthly payment follows from that. Change the down payment, the residual ratio or the term and you see immediately how the monthly burden, the total paid and the total interest all move. Use it before signing to compare several sets of terms and settle on a budget you can live with.
How to use the calculator
- Enter the vehicle price Put in the price of the car you are considering. Using the leaseable amount stated on a dealer quotation gives a more accurate result.
- Set the down payment If you will pay something at signing, enter it here. Leave it at zero to model a lease with nothing down.
- Adjust the residual value ratio Set the proportion of the price the car is expected to be worth at the end of the contract. If a dealer has quoted a residual ratio, use that figure.
- Choose the interest rate and term Enter the annual rate from the quotation and the lease term you want, from one to seven years.
- Review the result and the schedule The monthly payment, the total paid and the total interest appear automatically, together with the year-by-year movement of the outstanding balance.
Tips for getting more out of it
- Setting a higher residual value rate lowers your monthly payment, but be aware you may face an end-of-lease settlement or a re-lease decision when the term ends.
- Businesses leasing vehicles can often deduct the full monthly payment as a rental expense, which simplifies accounting compared to owning the vehicle outright.
- Open-end leases (with residual settlement) and closed-end leases (without it) shift risk differently, so always confirm which type your contract uses before signing.
- Maintenance leases that bundle inspections and servicing cost more per month, but remove the worry of unexpected repair bills during the term.
- For the same vehicle price, a shorter lease term raises the monthly payment but lowers total interest paid, so pick a term that matches your budget.
When this calculator helps
Weighing a lease against buying on credit
Compare the monthly and total figures produced here with a quotation for a loan purchase to see which suits your finances better.
Assessing a lease for a company vehicle
Businesses can run several combinations of residual ratio and term to understand the effect on deductible expenses and on the annual cash flow.
Costing the choices at the end of the contract
Knowing the residual amount in advance lets you weigh returning the car, buying it by paying the residual, or re-leasing, with actual numbers behind the decision.
Tuning the down payment and term to a budget
Vary the down payment and the length of the lease repeatedly to find the combination that fits within your monthly budget.
Terms used in car leasing
- Residual value
- The value the vehicle is expected to retain when the contract ends. Lease payments are based on the price minus this figure, so a higher residual means a lighter monthly burden.
- Residual value ratio
- The residual value expressed as a proportion of the vehicle price. Popular models and trims hold their trade-in value more predictably and tend to be given a higher ratio.
- Open-end lease
- A contract where, if the car is worth less at the end than the assumed residual, the lessee pays the shortfall. Exceeding the mileage allowance or damaging the vehicle makes such a shortfall more likely.
- Closed-end lease
- A contract with no settlement of the residual: you simply return the car and the agreement ends. The lessee carries less price risk, though the monthly payment is sometimes set a little higher than on an open-end lease.
- Maintenance lease
- A lease whose monthly charge includes inspections, statutory checks and replacement of consumables. It avoids sudden bills, at the cost of a higher monthly figure than a lease without maintenance.
- Mileage allowance
- The annual limit on distance set in the lease. Going over it incurs a per-kilometre charge, so it is worth comparing the limit with your actual annual mileage before signing.
Frequently Asked Questions
Side Note — Leasing a Car Means Using It, Not Owning It
A car lease uses the same amortization math as an auto loan, but the key difference is that you only pay off the portion of the vehicle price above its residual value, since you return the car at the end of the term instead of keeping it. Because the residual value is set based on the car's expected future resale price, popular models and trims tend to carry higher residual rates, which in turn lowers the monthly payment.
One reason businesses favor leasing is simpler bookkeeping: buying a vehicle outright means tracking depreciation, inspection costs, and taxes separately, while a lease payment can usually be expensed in full as a rental cost each month. Residual-value leases have also become popular with individual drivers who want to drive a new car every few years without a large capital outlay.
Mileage limits deserve special attention in any lease contract. Most agreements cap annual mileage at a set figure, and driving beyond that limit triggers a per-mile or per-kilometer overage charge. If you expect a long commute or frequent road trips, check the mileage terms before signing and consider a higher-mileage plan to keep your total cost down.