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.

Tips

  • 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.

Frequently Asked Questions

A lease assumes you'll return the vehicle at the end of the term, so you only pay off the portion of the price above its residual value (the projected future resale value) — which usually keeps the monthly payment lower than a loan for the same vehicle. The leasing company keeps ownership throughout.

On an open-end lease, if the vehicle's actual value at lease end turns out to be lower than the residual value that was assumed, you're responsible for paying the difference. Excess mileage and vehicle damage are common causes of this shortfall.

The base payment typically covers the vehicle cost, interest, taxes, and compulsory insurance. Choosing a maintenance lease also folds in inspection, servicing, and consumable-replacement costs. Optional (comprehensive) insurance is usually purchased separately.

You typically have three options: return the vehicle, buy it out for the residual value, or start a new lease on another car. Most contracts also set a mileage cap, and driving beyond it triggers an additional charge.

Most car leases aren't designed for early termination, and canceling usually means paying an early-termination fee roughly equal to the remaining lease payments in one lump sum. Always review the cancellation terms before signing.
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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.

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