A walkthrough, end to end.
- 1
Enter the asset's capitalized cost (negotiated price), residual value at lease end, money factor, and term in months.
- 2
The calculator returns the monthly payment, total cost over the lease, and the equivalent APR.
- 3
Use it for any leased asset — equipment, real estate, vehicles.
Lease payment math
Lease payment = depreciation fee + finance fee. Depreciation = (cap cost − residual) / months. Finance = (cap cost + residual) × money factor. Money factor × 2400 = approximate APR.
What you can do with this.
Equipment lease pricing
Business leases for $40K equipment with $10K residual at 0.0025 money factor over 36 months: depreciation $833/mo + finance $125/mo = $958/mo. The calculator confirms the lessor's quote.
Money factor to APR conversion
Money factor × 2400 = APR. A 0.00250 money factor ≈ 6% APR. Money factor 0.00125 ≈ 3% APR. Knowing the conversion helps compare lease quotes against loan APR offers.
Residual value impact
Higher residual = lower lease payment (less depreciation to cover). A $25K asset with $15K residual costs less per month than the same asset with $10K residual. Premium brands often have higher residuals — partly why their lease deals look attractive.
Down payment (cap cost reduction)
Cap cost reduction = lease 'down payment'. Lowers monthly payment but you lose the cash if the asset is totaled. Generally avoided in modern leasing.
Sales tax on leases
US states tax leases differently — some on monthly payment, some on full price upfront, some on the depreciation portion only. Not included in this calculator's payment; verify with your lessor or state DMV.
Lease vs. buy decision
Lower monthly payment + flexibility favors leasing. Lower total cost + ownership equity favors buying. Match lease length to how long you'd realistically keep the asset.
End-of-lease options
Buy out (pay residual + fees), turn in, or roll into next lease. If market value > residual, buying out is profitable; if market value < residual, walk away.
Lease calculator 2026 — what's current
Money factors have firmed up with the rate cycle. Negotiate the cap cost (price) — it's where the dealer makes most lease profit. Residuals are set by the lessor's residual book and harder to negotiate.
Frequently asked.
Lease industry's term for the financing rate, expressed as a decimal. Multiply by 2,400 to get the approximate APR — 0.0015 ≈ 3.6% APR. Lower is better.
Per month, almost always. Total cost over the asset's useful life, almost always more (you pay depreciation + interest, never own the asset). Match the choice to your hold period and use.
Generally no — set by the lessor's residual book based on industry data. You CAN negotiate the cap cost (negotiated price) and the money factor. That's where lease deals are won or lost.
No. Calculations run entirely in your browser.