CARMIND

Tools

Lease calculator

Plug in the exact line items off a dealer's lease worksheet. The monthly payment, the depreciation and finance breakdown, and the MSD savings all update as you type.

$

What you negotiated, not MSRP. Manufacturer rebates and lease cash reduce this.

≈ 4.8% APR (MF × 2,400)

%

= $23,200 at lease end

%

On the monthly payment

$

First month + cap reduction + fees. Use MSDs instead of cap reduction where possible.

$

One-time, captive lender

$

At return

00 MSDs10

Refundable. Each MSD reduces the money factor by 0.00007. Supported by BMW, Audi, Lexus, Acura captives.

Monthly payment

$631.62

36-month lease at an effective 4.8% APR

Depreciation portion
$466.67
Finance (rent) charge
class="relative z-10"26.40
Sales tax
$38.55

Out-of-pocket

Drive-off cash
$2,500
Disposition fee (at return)
$395
Total lease cost (net of MSD refund)
$25,633

Equivalent monthly: $712.03/mo over the term.

How lease math actually works

A lease finances the depreciation between the cap cost (negotiated price) and the residual value (lender's projection of what the car is worth at lease end). You pay that depreciation off in equal monthly installments, plus a finance charge (the money factor times the sum of cap cost and residual), plus sales tax on the monthly. That's it.

Three numbers determine the monthly payment more than anything else:

  • Cap cost. Negotiate this just like you'd negotiate a purchase. Lease cash from the manufacturer reduces it; cap cost reduction (cash down) also reduces it, but is risky if the car is totaled.
  • Money factor. The lease equivalent of an interest rate. Multiply by 2,400 to convert to APR. Captive lenders publish a "buy rate" each month and dealers may mark it up; ask for the buy rate in writing.
  • Residual percentage. Set by the captive lender and not negotiable. Higher residual = less depreciation to finance = lower monthly. Toyota, Honda, and Lexus typically lead on residuals.

For the decision of whether to lease at all, see our lease vs buy calculator which runs both scenarios for the same car. For the full negotiation playbook, see the leasing primer in the Buying Guide.

Frequently asked

How do I find the money factor on a lease quote?
Dealers rarely list money factor directly. Look for "rate" or "MF" on the lease worksheet — sometimes hidden in the small print. If you only see a "rent charge" or APR, divide the APR by 2,400 to convert back to money factor. Always confirm in writing before signing; some captive lenders publish current programs on Leasehackr or their own dealer-facing sites.
How do MSDs (Multiple Security Deposits) work?
Each MSD is one extra monthly payment paid up front, refundable at lease end as long as you return the car within mileage and wear limits. Each MSD reduces the money factor by approximately 0.00007 (BMW, Audi, Lexus) or 0.00010 (Acura). Most captives allow up to 7-10 MSDs. On a typical $500/mo lease with 7 MSDs at 0.00007 reduction, you put $3,500 down (refundable) and save $30-50/mo on the payment — roughly class="relative z-10",200 in real interest savings over a 36-month term.
What's a 'good' money factor?
Good is relative to the captive lender's published 'buy rate' for the current month and your credit tier. As a rough benchmark, a money factor below 0.00150 (about 3.6% APR) is excellent. Above 0.00300 (about 7.2% APR) is high — and at that point you should compare against financing the same vehicle. Mark-ups above the buy rate are negotiable on most captives, just like APR mark-ups on a finance deal.
Why is the depreciation portion different from the price drop?
A lease finances the depreciation between the cap cost and the residual value. If a $40,000 car has a 60% residual at 36 months, the residual value is $24,000 — meaning the lease finances class="relative z-10"6,000 of depreciation. That class="relative z-10"6,000 divided by 36 months is $444 of monthly depreciation. The actual market depreciation might be more or less, but the lease residual is fixed at signing.
Should I put cash down on a lease?
Generally no. Putting cash down on a lease (called 'cap cost reduction') is essentially prepaying interest. If the car is totaled or stolen in the first few months, you don't get that money back; your gap insurance only covers the difference between insurance payout and remaining lease balance. Use MSDs instead — they reduce the money factor AND are refundable.
Is the monthly payment the only number that matters?
No — and this is where most lessees get hurt. Always evaluate the total cost over the term (monthly × term + cash at signing + disposition fee), because dealers can lower the monthly by raising the cap cost reduction or the money factor in ways that don't show on the headline number. This calculator surfaces both: the monthly payment and the all-in total.