Car Lease Calculator

This calculator will attempt to estimate the monthly payment of a car you are looking to lease. We also offer a lease or buy calculator which enables you to quickly compare the cost of leasing a vehicle versus buying it.

Shoppers can also view current Cambridge auto loan rates below.

Current Cambridge Auto Loan Rates

What’s a Lease Agreement Look Like?

If you are in the market for a new car, I’m sure leasing has emerged as one of the viable options. But, leasing a car may or may not be the right choice for you, so let’s take a look at some of the basic concepts, to better understand the whole process. What better way than by looking at an actual lease agreement. This was provided by a kind soul who felt unprepared when leasing his vehicle, and he wanted to enlighten those who were considering taking the same step. Below, I will address some of the leasing terms that may be Greek to you.

Don’t Forget the Fees Please

First of all, leasing is similar to renting… at the end of the agreed term, you own nothing. At that point you will need to find another vehicle. If you really loved your leased vehicle, you have the option to buy it at the agreed residual value, which is the value of the car at the end of the lease.A fee may be charged to buy the vehicle. If you decide not to buy, you can turn it in and walk away, provided your car is in pristine condition. If you have any nicks or damages, you will pay extra for excess wear and tear. You may want to cover this topic with the dealer before signing on the dotted line. Your idea of excess wear and tear may be different than his. It’s also very important to maintain the engine as indicated in the manual. You are responsible for maintenance. In the fine print you can see that there is also another fee for excess mileage. This example states a 10,000 mile limit, but many leases have a 12,000 to 15,000 mile per year limit. The charge for going over the limit is anywhere from 10 to 25 cents per mile. Contracts which are ended early also come with an early termination fee which makes it more expensive for leasees to return vehicles before their term is up. Also, if you decide not to buy the car at the end of the lease, you will be charged a disposition fee. Oh, and don’t forget that there will also be acquisition fees, registration fees, doc fees and possibly a tire fee.

Any of these other incidental costs would be in addition to those expressed in the above calculator.

The Most Important Factor is Not the Monthly Payment

Lower monthly payments are usually the reason most people are lured to car leases. That is what the dealers want you to focus on. But low monthly payments are only part of the picture. When you are buying a car, the most important number is the negotiated price. Leasing is no different. Sites like NADA Guides and kbb.com can help you find the fair purchase price of the car you are considering. Capitalized cost is the agreed purchase price plus some taxes and fees. Capitalized cost reductions are trade-ins, down payments and rebates that reduce the total capitalized cost.

Your monthly payment is determined by the difference between the capitalized cost and the residual value and an interest rate called a money factor. Your monthly payments will be lower if you reduce the capitalized cost or increase the residual value. It’s quite odd, but federal regulations don’t require the dealer to show the formula for calculating your payment. If you do want to know, be persistent and tell the dealer upfront that you expect transparency.

Money Factor

Money factor is an alternative way of expressing interest rates. Rather than stating the actual interest rate, a far lower number is stated, to make the cost look or feel smaller. The money factor number needs to be multiplied by 2400 to get the actual APR of the loan.

Where does 2400 come from?

• 12 * 2 * 100
• 12 months in the year
• 2 for taking the average across the 12 months
• 100 for expressing a whole number (or the fraction thereof) as a percent

Money Factor	Interest Rate	Money Factor	Interest Rate
0.000	0.00%	0.0051	12.24%
0.001	0.24%	0.0052	12.48%
0.002	0.48%	0.0053	12.72%
0.0003	0.72%	0.0054	12.96%
0.0004	0.96%	0.0055	13.20%
0.0005	1.20%	0.0056	13.44%
0.0006	1.44%	0.0057	13.68%
0.0007	1.68%	0.0058	13.92%
0.0008	1.92%	0.0059	14.16%
0.0009	2.16%	0.0060	14.40%
0.0010	2.40%	0.0061	14.64%
0.0011	2.64%	0.0062	14.88%
0.0012	2.88%	0.0063	15.12%
0.0013	3.12%	0.0064	15.36%
0.0014	3.36%	0.0065	15.60%
0.0015	3.60%	0.0066	15.84%
0.0016	3.84%	0.0067	16.08%
0.0017	4.08%	0.0068	16.32%
0.0018	4.32%	0.0069	16.56%
0.0019	4.56%	0.0070	16.80%
0.0020	4.80%	0.0071	17.04%
0.0021	5.04%	0.0072	17.28%
0.0022	5.28%	0.0073	17.52%
0.0023	5.52%	0.0074	17.76%
0.0024	5.76%	0.0075	18.00%
0.0025	6.00%	0.0076	18.24%
0.0026	6.24%	0.0077	18.48%
0.0027	6.48%	0.0078	18.72%
0.0028	6.72%	0.0079	18.96%
0.0029	6.96%	0.0080	19.20%
0.0030	7.20%	0.0081	19.44%
0.0031	7.44%	0.0082	19.68%
0.0032	7.68%	0.0083	19.92%
0.0033	7.92%	0.0084	20.16%
0.0034	8.16%	0.0085	20.40%
0.0035	8.40%	0.0086	20.64%
0.0036	8.64%	0.0087	20.88%
0.0037	8.88%	0.0088	21.12%
0.0038	9.12%	0.0089	21.36%
0.0039	9.36%	0.0090	21.60%
0.0040	9.60%	0.0091	21.84%
0.0041	9.84%	0.0092	22.08%
0.0042	10.08%	0.0093	22.32%
0.0043	10.32%	0.0094	22.56%
0.0044	10.56%	0.0095	22.80%
0.0045	10.80%	0.0096	23.04%
0.0046	11.04%	0.0097	23.28%
0.0047	11.28%	0.0098	23.52%
0.0048	11.52%	0.0099	23.76%
0.0049	11.76%	0.0100	24.00%
0.0050	12.00%	0.0101	24.24%

Is Leasing Right for You?

Cars which tend to depreciate quickly like sports cars tend to cost more to lease, whereas cars which hold their value better tend to cost relatively less to lease.

If you are someone who likes a new car every couple years and have no problem with continual monthly payments, a lease may work well for you. Or, if you can write off the cost of a lease as a business expense, a lease may also work for you. But if you are someone who looks forward to one day driving a car knowing it’s free and clear of any payments, then leasing is not for you. With today’s technology, cars are more reliable and last longer than ever. Even with a regular 5 year car loan it’s not impossible to drive that same car debt free for another 5 years. Leasing does not give you this freedom.

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