{
  "id": "lease",
  "version": "4a9fff7b8b50",
  "status": "published",
  "name": "Lease Calculator",
  "question": "What will my car lease payment be?",
  "summary": "Computes a vehicle lease payment from the price, residual value, money factor, term, and sales tax, or the money factor inside a quoted payment.",
  "category": "finance",
  "subcategory": "loans",
  "url": "https://www.acalculator.org/finance/lease-calculator",
  "markdown": "https://www.acalculator.org/finance/lease-calculator.md",
  "kind": "function",
  "method": "payment = (price − down − residual) ÷ months + (price − down + residual) × money factor, with residual = MSRP × residual %; with tax = payment × (1 + tax rate); rate equivalent = money factor × 2,400.",
  "assumptions": [
    "The payment follows the Regulation M progression: depreciation and amortized amounts plus the rent charge, spread over the months.",
    "The monthly rent charge is the money factor times the adjusted cap cost plus the residual value.",
    "Sales tax is charged on each monthly payment, as in most states; amounts due at signing are not included.",
    "The rate equivalent (money factor × 2,400) is a rule of thumb, not a disclosed lease rate."
  ],
  "inputs": {
    "$schema": "https://json-schema.org/draft/2020-12/schema",
    "type": "object",
    "properties": {
      "msrp": {
        "title": "MSRP (sticker price)",
        "description": "The manufacturer’s suggested retail price, which the residual percentage is taken of.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 1000,
        "maximum": 10000000
      },
      "rv": {
        "title": "Residual value (% of MSRP)",
        "description": "The value the lessor sets for the end of the lease, as a percent of the MSRP.",
        "type": "number",
        "x-unit": "percent",
        "exclusiveMinimum": 0,
        "maximum": 100
      },
      "price": {
        "title": "Negotiated price",
        "description": "The gross capitalized cost: the agreed value of the vehicle plus any fees or items paid over the lease.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 1000,
        "maximum": 10000000
      },
      "down": {
        "title": "Down payment, trade-in and rebates",
        "description": "The capitalized cost reduction: cash down, net trade-in allowance, and rebates.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 10000000
      },
      "months": {
        "title": "Lease term (months)",
        "description": "The number of monthly payments, for example 24, 36, or 48.",
        "type": "integer",
        "minimum": 1,
        "maximum": 72
      },
      "find": {
        "title": "Find",
        "description": "Pick \"Payment\" to work out the payment from a money factor, or \"Money factor\" to find it in a quoted payment.",
        "type": "string",
        "enum": [
          "payment",
          "mf"
        ]
      },
      "mf": {
        "title": "Money factor",
        "description": "The number the lessor multiplies the adjusted cap cost plus the residual by to get the monthly rent charge.",
        "type": "number",
        "minimum": 0,
        "maximum": 0.01
      },
      "quoted": {
        "title": "Quoted payment before tax",
        "description": "The base monthly payment the dealer quoted, before sales tax.",
        "type": "number",
        "x-unit": "USD",
        "exclusiveMinimum": 0,
        "maximum": 1000000
      },
      "tax": {
        "title": "Sales tax on the payment",
        "description": "The sales or use tax rate charged on each monthly payment.",
        "type": "number",
        "x-unit": "percent",
        "minimum": 0,
        "maximum": 25
      }
    }
  },
  "outputs": {
    "payment": {
      "label": "Monthly payment before tax",
      "description": "The base monthly payment: depreciation plus rent charge.",
      "format": "money"
    },
    "mfOut": {
      "label": "Money factor",
      "description": "The money factor: the monthly rent charge divided by the adjusted cap cost plus the residual value.",
      "format": "number"
    },
    "rate": {
      "label": "Rate equivalent",
      "description": "The money factor times 2,400: roughly the yearly interest rate the rent charge is like.",
      "format": "percent"
    },
    "total": {
      "label": "Monthly payment with tax",
      "description": "The base monthly payment plus the sales tax on it.",
      "format": "money"
    },
    "residual": {
      "label": "Residual value",
      "description": "The MSRP times the residual percentage.",
      "format": "money"
    },
    "capCost": {
      "label": "Adjusted cap cost",
      "description": "The negotiated price minus the down payment, trade-in, and rebates.",
      "format": "money"
    },
    "depreciation": {
      "label": "Depreciation per month",
      "description": "The adjusted cap cost minus the residual value, divided by the months.",
      "format": "money"
    },
    "rent": {
      "label": "Rent charge per month",
      "description": "The money factor times the adjusted cap cost plus the residual value.",
      "format": "money"
    },
    "totalPaid": {
      "label": "Total of monthly payments",
      "description": "The monthly payment with tax times the number of months.",
      "format": "money"
    },
    "totalRent": {
      "label": "Total rent charge",
      "description": "The rent charge over the whole lease: what the lease costs beyond depreciation.",
      "format": "money"
    }
  },
  "defaultAnswer": {
    "inputs": {
      "msrp": 40000,
      "rv": 58,
      "price": 38000,
      "down": 3000,
      "months": 36,
      "find": "payment",
      "mf": 0.0025,
      "quoted": 450,
      "tax": 7
    },
    "outputs": {
      "payment": 473.27777777777777,
      "mfOut": 0.0025,
      "rate": 6,
      "total": 506.40722222222223,
      "residual": 23200,
      "capCost": 35000,
      "depreciation": 327.77777777777777,
      "rent": 145.5,
      "totalPaid": 18230.66,
      "totalRent": 5238
    },
    "text": "A lease of $38,000.00 with $3,000.00 down and a $23,200.00 residual over 36 months costs $506.41 a month with tax, at money factor 0.0025."
  },
  "examples": [
    {
      "given": {
        "msrp": 40000,
        "rv": 58,
        "price": 38000,
        "down": 3000,
        "months": 36,
        "find": "payment",
        "mf": 0.0025,
        "tax": 7
      },
      "expect": {
        "residual": 23200,
        "payment": 473.27777777777777,
        "total": 506.40722222222223,
        "totalRent": 5238,
        "rate": 6
      },
      "source": "hand calculation in content.mdx (Regulation M payment progression, 12 CFR 1013.4(f))"
    },
    {
      "given": {
        "msrp": 19000,
        "rv": 65,
        "price": 18800,
        "down": 0,
        "months": 36,
        "find": "payment",
        "mf": 0.00354,
        "tax": 0
      },
      "expect": {
        "residual": 12350,
        "rent": 110.271,
        "payment": 289.43766666666664
      },
      "source": "Federal Reserve Board, Keys to Vehicle Leasing, rent charge example: 0.00354 × (18,800 + 12,350) = $110.27; the rest by hand in content.mdx"
    },
    {
      "given": {
        "msrp": 30000,
        "rv": 60,
        "price": 29000,
        "down": 2000,
        "months": 36,
        "find": "mf",
        "quoted": 400,
        "tax": 0
      },
      "expect": {
        "mfOut": 0.0033333333333333335,
        "rate": 8,
        "residual": 18000
      },
      "source": "hand calculation in content.mdx: (400 − 9,000 ÷ 36) ÷ 45,000"
    }
  ],
  "sources": [
    "Regulation M (Consumer Leasing), 12 CFR 1013.4(f), Payment calculation for motor vehicle leases. https://www.consumerfinance.gov/rules-policy/regulations/1013/4/",
    "Federal Reserve Board, Keys to Vehicle Leasing: More information about the rent charge. https://www.federalreserve.gov/pubs/leasing/resource/consider/ongoing_info6.htm",
    "Federal Reserve Board, Keys to Vehicle Leasing: frequently asked questions. https://www.federalreserve.gov/Pubs/leasing/resource/faq.htm"
  ],
  "related": [
    "loan",
    "business-loan",
    "personal-loan"
  ],
  "changelog": []
}