Lease Calculator
Adjust the inputs below. Results update as you type.
How it works
Monthly payment = depreciation fee + finance fee + taxes. Depreciation = (cap cost − residual) / months. Finance fee = (cap cost + residual) × money factor. Total lease cost = monthly payments + fees + acquisition cost. Compare to purchase: leasing is cheaper monthly but builds no equity. Excess mileage charges (typically $0.15–0.25/mile) and disposition fees add to end-of-lease cost.
Input guidance
- Use realistic rates from lender or provider quotes instead of headline averages.
- Model conservative, baseline, and optimistic scenarios before deciding.
- Include recurring real-world costs (fees, taxes, insurance, maintenance) where relevant.
The formula
A lease payment covers depreciation plus a finance charge: payment ≈ (capitalized cost − residual)/term + (capitalized cost + residual) × money factor.
Worked example
Leasing equipment worth $24,000 with a $6,000 residual over 24 months at a 0.002 money factor costs about ($18,000/24) + ($30,000 × 0.002) = $750 + $60 = $810/month.
More examples to test
- Conservative case: use a higher interest rate and lower growth assumptions to stress-test affordability.
- Optimistic case: use a lower rate with stable income assumptions to compare upside potential.
How to interpret results
Treat this as a planning model, not a final approval tool. Compare at least two scenarios and focus on total-cost and cash-flow trade-offs.
When this can be inaccurate
Results can diverge due to fees, changing rates, tax rules, lender policies, and behavior changes that simplified models cannot fully capture.
Change history
- July 2026: Quality-reviewed for publication with formula checks and explanatory copy updates.
Site-wide corrections also appear on the corrections log.
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Frequently asked questions
What drives a lease payment?+
The asset value, the residual (its worth at lease end), the term, and the money factor or interest rate built into the lease.
Is leasing cheaper than buying?+
Monthly costs are usually lower, but you build no ownership. Over many years, buying and keeping an asset is often cheaper overall.
What happens at lease end?+
You typically return the asset, renew, or buy it for the residual value, depending on the lease terms.
How should I use this result?+
Treat it as a planning estimate. Compare at least two realistic scenarios, then confirm with statements, quotes, or a qualified professional before acting.
How often should I refresh assumptions?+
Refresh whenever rates, income, costs, or policy limits change materially, and before making irreversible commitments.