Buying or leasing a car is a significant financial decision. Understanding the monthly payments you’ll owe can help you budget wisely and choose the best option for your situation. A Car Loan Lease Calculator is a powerful tool that estimates monthly payments for both car loans and leases, giving you clarity and control over your car financing.
Car Loan Lease Calculator
How to Use the Car Loan Lease Calculator
- Enter Car Price or Capitalized Cost – For loans, input the total car price. For leases, input the negotiated capitalized cost.
- Input Down Payment or Trade-in Value – Any upfront amount reducing your financed amount.
- Enter Loan or Lease Term – Number of months for repayment or lease duration.
- Input Interest Rate or Money Factor – Annual interest rate for loans or money factor for leases (convert money factor to interest rate by multiplying by 2400).
- Enter Residual Value (For Lease) – Estimated car value at lease end, usually a percentage of MSRP.
- Calculate – Get estimated monthly payments for loan and lease options.
Formulas Used in Calculation
Car Loan Monthly Payment Formula:
M = P × (r(1 + r)^n) / ((1 + r)^n − 1)
Where:
- M = Monthly payment
- P = Principal loan amount (Car price − down payment)
- r = Monthly interest rate (annual rate ÷ 12)
- n = Total number of payments (loan term in months)
Car Lease Monthly Payment Formula:
Lease payments are typically calculated as the sum of:
- Depreciation Fee = (Capitalized Cost − Residual Value) ÷ Lease Term
- Finance Fee = (Capitalized Cost + Residual Value) × Money Factor
Monthly Lease Payment = Depreciation Fee + Finance Fee
Example Calculation
Example: Loan
- Car Price = $30,000
- Down Payment = $5,000
- Loan Term = 60 months
- Annual Interest Rate = 5% (0.05)
Monthly interest rate = 0.05 ÷ 12 = 0.004167
Principal = $30,000 − $5,000 = $25,000
M = 25,000 × (0.004167 × (1 + 0.004167)^60) / ((1 + 0.004167)^60 − 1) ≈ $471.78
Example: Lease
- Capitalized Cost = $30,000
- Residual Value = $18,000
- Lease Term = 36 months
- Money Factor = 0.00125
Depreciation Fee = (30,000 − 18,000) ÷ 36 = $333.33
Finance Fee = (30,000 + 18,000) × 0.00125 = $60
Monthly Lease Payment = $333.33 + $60 = $393.33
Benefits of Using the Car Loan Lease Calculator
- Compare Loan vs Lease – Understand monthly payments side by side.
- Budget Planning – Know exactly what to expect each month.
- Negotiate Better Deals – Use accurate numbers to bargain with dealers.
- Understand Costs – See how down payment, term, and rates affect payments.
- Save Time – Quick and easy calculations without guesswork.
Tips for Using the Calculator
- Enter Accurate Values – Use dealer quotes or financing offers.
- Check Money Factor – Convert to interest rate to compare costs properly.
- Include Taxes and Fees Separately – These often vary by location.
- Compare Total Cost of Ownership – Include maintenance, insurance, and mileage limits.
- Use for Refinancing or Lease Buyouts – See how new terms affect payments.
20 Frequently Asked Questions (FAQs)
Q1: What is the difference between a car loan and a lease?
A loan means you own the car after payments; leasing means you return it after the lease term.
Q2: What is a money factor?
A money factor is the lease interest rate expressed differently; multiply by 2400 to get APR.
Q3: Can I use this calculator for used cars?
Yes, as long as you have accurate loan or lease terms.
Q4: Does the calculator include taxes?
Typically no, taxes and fees should be added separately.
Q5: How is the residual value determined?
Usually a percentage of MSRP estimated by the leasing company.
Q6: Can I calculate lease payments with mileage limits?
Mileage limits affect residual value and lease terms, but this calculator assumes standard residuals.
Q7: How do down payments affect payments?
Higher down payments reduce monthly payments.
Q8: Can I calculate early payoff?
Not directly, but you can estimate payoff amounts from remaining balance and interest.
Q9: Is the calculator free?
Yes, many online calculators are free.
Q10: Can I compare multiple loan offers?
Yes, by inputting different rates and terms.
Q11: What is capitalized cost?
It’s the negotiated price of the car for leasing purposes.
Q12: Can I input trade-in values?
Yes, trade-ins reduce the amount financed.
Q13: Does the calculator handle balloon payments?
No, it assumes standard amortized payments.
Q14: What if I want to lease to own?
Lease-to-own terms vary; consult your dealer for specifics.
Q15: How do I know if leasing is better than buying?
Use this calculator to compare monthly costs and total payments.
Q16: Can I calculate payments for commercial vehicles?
Yes, if you have the loan or lease terms.
Q17: Does the calculator consider credit score?
No, but credit affects interest rates and approval.
Q18: How often are lease payments due?
Usually monthly.
Q19: Can I include fees like acquisition or disposition fees?
Add those separately, as they’re not part of monthly payments.
Q20: Where can I find this calculator?
Many automotive and financial websites offer free calculators online.