Lease Calculator
Calculate your monthly payments, total costs, and view a complete payment schedule for vehicle or equipment leases.
Understanding Leases
Our Lease Calculator helps you plan your vehicle or equipment lease by showing exactly how much you'll pay each month, the total cost over the lease term, and helping you understand the financial implications of your lease agreement.
How Leases Work
A lease is a contractual agreement where you pay for the use of a vehicle or equipment for a specified period without owning it. You're essentially paying for the depreciation of the item during your use period, plus interest and fees. At the end of the lease, you typically return the item or have options to purchase it at the predetermined residual value.
Key Lease Terms to Understand:
- Item Value: The current market value of the vehicle or equipment being leased.
- Residual Value: The estimated value of the item at the end of the lease term.
- Money Factor: Another way to express the interest rate (equivalent to the APR divided by 2400).
- Capitalized Cost: The negotiated price of the leased item plus any additional fees.
- Capitalized Cost Reduction: Any down payment, trade-in credit, or rebates that reduce the capitalized cost.
- Lease Term: The length of the lease agreement, typically 24, 36, or 48 months for vehicles.
Types of Leases:
- Closed-End Lease: You return the item at the end of the lease with no further obligation (most common).
- Open-End Lease: You may be responsible for any difference between the actual and predetermined residual value.
- Single-Payment Lease: You make one lump-sum payment instead of monthly payments.
- Finance Lease: More common for business equipment, typically transfers ownership.
- Operating Lease: Short-term lease with no ownership transfer, often used for business accounting.
- TRAC Lease: Terminal Rental Adjustment Clause lease, common for commercial vehicles.
How to Use the Calculator:
- Enter the full value of the item you're leasing
- Input the estimated residual value at lease end
- Specify the annual interest rate (APR)
- Enter the lease term in months or years
- Select your preferred payment frequency
- Include any down payment amount
- Add sales tax rate if applicable in your region
- Click "Calculate Lease Details" to see your results
Smart Leasing Tips
- Negotiate the capitalized cost (purchase price) just as you would when buying
- Pay attention to the residual value - higher residual means lower monthly payments
- Be aware of mileage limits and excess mileage charges
- Understand what wear and tear is considered "normal" vs. chargeable
- Consider gap insurance to cover the difference between insurance payout and lease payoff if the item is totaled
- Compare multiple lease offers before signing
- Ask about lease-end options and associated fees