Monthly Payment $694
Total Payments $24,984
Total Cost $26,984
Total Interest $2,984
Leasing Calculator
Calculate your monthly lease payment and total leasing cost. Compare leasing with buying options.
How Lease Payments Work
A lease payment has two components:
- Depreciation: (Asset Value - Down Payment - Residual) ÷ Term
- Finance Charge: (Financed Amount + Residual) × Monthly Rate
- Monthly Payment = Depreciation + Finance Charge
Example
Leasing a $40,000 vehicle with $16,000 residual, $2,000 down, 5% APR for 36 months:
- Monthly payment: ~$694
- Total payments: $24,984
- Total cost including down payment: $26,984
FAQ
- How is a lease payment calculated?
- Lease payments consist of two parts: depreciation (asset value minus residual value divided by term) and finance charge (based on money factor or interest rate).
- What is residual value?
- Residual value is the estimated value of the asset at the end of the lease term. Higher residual value means lower monthly payments.
- Is leasing better than buying?
- Leasing offers lower monthly payments and no ownership risk, but you don't build equity. Buying is better for long-term ownership.
- Can I negotiate lease terms?
- Yes, you can negotiate the asset price, residual value, money factor, and fees. A lower price or higher residual reduces payments.