Auto Lease Calculator
Calculate your monthly car lease payment including depreciation, rent charge and sales tax. Estimate the total cost of a lease.
Expected value at lease end, usually set as a % of MSRP.
Monthly lease payment
$490.21
Tax-inclusive (7%)
Residual value
$19,250
Value at lease end
Total of payments
$17,648
Over 36 months
Rent charge
$2,743
The financing cost of the lease
Lease payment = depreciation + rent charge (interest), with tax on top. Negotiating the price and keeping the residual high are the two big levers.
How it works
Depreciation = (cap cost − residual) ÷ term. Rent charge = (cap cost + residual) × money factor. Payment = depreciation + rent charge + tax.
Example: $35,000 car, $22,000 residual, 0.0018 MF, 36 months → ~$477/month + tax.
Last updated: April 2026
How this calculator is verified
Checked by True Calculator automated test suite on
- Formula verified against a published worked example in the automated test suite
- Edge cases (zero, negative, boundary and unit-mismatch inputs) covered by unit tests
The full verification method is on our how we verify page. Found an error? Tell us and we will re-check it.
When to Use This Calculator
Use the auto lease calculator when a dealership offers you a lease instead of a loan, and you want to see what the monthly payment is actually made of. Leasing is still uncommon in India but is growing for company cars and new-vehicle buyers who want lower EMIs and a fresh car every few years. This tool breaks the monthly payment into the car's depreciation, the rent charge the financier earns, and sales tax, so you can compare a lease against a purchase on the same car. Fleet managers budgeting a monthly cost per vehicle and business owners providing cars to employees use it to model the total cost over the lease term. Enter the car's price, residual value, rate and term to get the payment before you negotiate.
How to Use This Calculator
- Step 1: Enter the car's MSRP (ex-showroom price) and the negotiated price you actually pay.
- Step 2: Set the residual value as a percentage of MSRP — the value the lease assumes the car keeps at the end.
- Step 3: Enter the money factor as an annual percentage rate, the lease term in months and the applicable tax rate.
- Step 4: Read the monthly payment split into depreciation and rent charge, plus the total of payments over the term.
Worked Example
A car with an MSRP of ₹12,00,000, negotiated down to ₹11,60,000, with a 50% residual (₹6,00,000), a 9% money-factor rate and a 36-month term works out as ₹15,556 of monthly depreciation plus ₹6,600 of rent charge — about ₹22,156 before tax. Passenger cars attract 28% GST, taking the payment to about ₹28,359 a month and the total of payments to about ₹10.21 lakh.
Tips and Common Mistakes
- •Tip 1: GST on passenger cars is 28% (with additional cess on larger models), so enter 28% or the cess-inclusive effective rate for your model.
- •Tip 2: The residual value is the biggest lever in a lease — a higher residual lowers depreciation and the monthly payment.
- •Tip 3: Car leasing in India is far more common among businesses and fleet users than individuals, so corporate terms are usually better.
- ✗Mistake 1: Entering the on-road price as MSRP — the residual and depreciation base shift and the payment comes out wrong.
- ✗Mistake 2: Forgetting the tax field; at 28% GST the quoted monthly payment rises by more than a quarter.
Frequently Asked Questions
How is an auto lease payment calculated?
Your payment is the depreciation over the lease term (capitalised cost minus residual, divided by the months) plus a rent charge based on the average of the cost and residual.
What is the residual value in a car lease?
It is the predicted value of the car at the end of the lease, set by the leasing company. A higher residual means lower depreciation and a lower monthly payment.
How does a larger down payment affect a lease?
More money down (capitalised cost reduction) lowers the financed portion and your monthly payment, though putting a big lump sum on a lease is often discouraged since you don't own the car.
Is this auto lease calculator free to use?
Yes, True Calculator's auto lease calculator is completely free with no sign-up, no app install and no usage limits.
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