Auto Lease Calculator Bankrate
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Reviewed by Calculator Editorial Team
Leasing a car can be a smart financial decision, offering predictable monthly payments and potential tax benefits. Our auto lease calculator helps you estimate your monthly payments, total lease cost, and compare different lease options.
How to Use This Calculator
To calculate your auto lease payments:
- Enter the vehicle price (excluding taxes and fees)
- Select the lease term in months
- Enter the down payment amount
- Enter the monthly interest rate (APR)
- Enter any additional fees (taxes, registration, etc.)
- Click "Calculate" to see your results
The calculator will show you your estimated monthly payment, total lease cost, and the total interest paid over the lease term.
Formula Used
Monthly Payment Calculation
The monthly payment is calculated using the standard loan payment formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n - 1 ]
Where:
- M = monthly payment
- P = principal loan amount (vehicle price + fees - down payment)
- i = monthly interest rate (APR/12/100)
- n = number of payments (lease term in months)
The total lease cost is calculated by multiplying the monthly payment by the lease term.
Worked Example
Let's calculate a lease for a $30,000 vehicle with these terms:
- Lease term: 36 months
- Down payment: $3,000
- Monthly interest rate: 2.5%
- Additional fees: $1,000
The principal loan amount is $30,000 + $1,000 - $3,000 = $28,000.
The monthly interest rate is 2.5%/12 = 0.2083%.
Using the formula:
M = $28,000 [ 0.002083(1 + 0.002083)^36 ] / [ (1 + 0.002083)^36 - 1 ]
This calculates to approximately $750 per month.
The total lease cost would be $750 × 36 = $27,000.
Lease vs. Purchase Comparison
| Factor | Lease | Purchase |
|---|---|---|
| Upfront Cost | Lower (down payment) | Higher (full purchase price) |
| Monthly Cost | Fixed payment | Variable (insurance, maintenance, etc.) |
| Ownership | No ownership at end | Ownership at end |
| Mileage Limit | Yes (penalties for overage) | No |
| Tax Benefits | Possible deductions | No deductions |
Leasing may be better if you want to drive a new car every few years or prefer predictable payments. Purchasing may be better if you want to own the vehicle long-term.
Frequently Asked Questions
What is the difference between a lease and a loan?
A lease is a contract to use a vehicle for a set period, while a loan is a long-term ownership agreement. At the end of a lease, you typically return the vehicle, whereas with a loan you keep it.
Can I get a lower interest rate on a lease?
Yes, you can negotiate a lower interest rate with the dealer or financial institution. Good credit and a larger down payment can help secure a better rate.
What happens if I exceed the mileage limit?
Most leases include a mileage allowance. If you exceed it, you'll typically pay a per-mile fee or a higher monthly payment for the remainder of the lease term.