Auto Lease Calculator

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How to use the Auto Loan Lease Calculator
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1. Input Vehicle Information

• Vehicle Price: Enter the full price of the car (e.g., $25,000).
• Vehicle Residual Value: Enter the estimated value of the car at the end of the lease (e.g., $15,000). This reflects depreciation.

2. Enter Financial Details

• Down Payment Percentage: Input the percentage of the car’s price you’ll pay upfront (e.g., 20%). The calculator automatically converts this into a dollar value.
• Loan Term: Choose the lease duration, such as 36 months (3 years).
• Credit Score Range: Select your credit score bracket, since it can affect your interest rate. (In the example, "Good (670–739)" is chosen.)
• Interest Rate: The calculator fills this based on your credit score, or you can adjust manually (e.g., 4.20%).

3. Loan Start Date

• Select when your lease begins (e.g., December 2025). The calculator uses this to generate a payment schedule.

4. Review the Lease Summary

On the right side, you’ll see:

• Monthly Payment: Your estimated monthly lease cost (e.g., $279).
• Loan Term: The duration of the lease (e.g., 36 months).
• Interest Rate: The applied annual percentage rate (APR).
• Total Cost: The sum of all lease payments over the term (e.g., $15,040).

5. Review the Lease Schedule

Below the summary, you get a detailed breakdown of each payment:

• Payment Date: When each payment is due.
• Principal: The portion that reduces the lease balance.
• Interest: The portion that goes to interest charges.
• Balance: The remaining balance after each payment.

For example, in Dec 2025:

• Principal: $139
• Interest: $140
• Balance: $4,861

This shows how your payments gradually reduce the balance.

What is a Car Lease?

A car lease is a long-term rental agreement that allows you to use a vehicle for a fixed period and number of miles. Instead of owning the car, you make monthly payments to the leasing company for the duration of the contract to cover the car's depreciation.

• Lease Term: This is the length of your lease agreement, which typically ranges from 24 to 48 months.
• Mileage Limit: Leases include an annual mileage cap, and you will face penalties if you exceed this limit by the end of the term.
• Down Payment: Often called a capitalized cost reduction, this is an optional upfront payment that lowers your subsequent monthly payments.
• Monthly Payments: This is the fixed amount you pay each month to use the vehicle for the duration of the lease.
• Wear and Tear: Your agreement will define acceptable wear and tear, and you may be charged for any damage that exceeds these standards upon returning the car.
• End-of-Lease Options: When the lease ends, you can typically return the vehicle, purchase it for a predetermined price, or lease a new car.

Why Lease?

The primary allure of leasing is financial flexibility and the thrill of driving a new vehicle every few years. Monthly payments are typically lower than loan payments for the same car because you're only paying for the vehicle's depreciation during the lease term, not its full value. This often means you can drive a more luxurious model than you might otherwise afford. Plus, since most leases last two to four years, the car is usually under the manufacturer's warranty, minimizing unexpected repair costs. However, leasing isn't without its drawbacks. You don't build any equity—at the end of the term, you have nothing to show for your payments. Leases also come with strict mileage limits and penalties for exceeding them, as well as charges for any wear and tear deemed excessive. For drivers who value ownership, drive long distances, or are tough on their cars, the traditional route of buying might be a better fit.

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Frequently asked questions