Monthly payment
$0
Due at signing
$0
Total lease cost
$0
Buy-out at end
$0
What you pay each month
$0
per month
A lease pays for the car's depreciation plus a finance charge, not the whole price. Plug in the numbers to see exactly what drives your monthly payment.
It is the interest rate on a lease, written as a small decimal. Multiply it by 2400 to convert it into an approximate APR. A money factor of 0.0015 is about 3.6 percent.
The value the leasing company expects the car to hold at the end of the term, set as a percentage of MSRP. A higher residual means less depreciation to pay for, which lowers the monthly payment.
Monthly payments are usually lower, because you pay for depreciation rather than the whole car. Over a longer horizon buying is normally cheaper, since you end up owning an asset instead of returning it.
A larger down payment lowers the monthly payment, but it is money at risk. If the car is totaled or stolen early in the lease, that amount is generally not returned to you.
How this works: a lease charges you for the car's expected depreciation (negotiated price minus residual value) plus a finance charge set by the money factor (money factor × 2400 ≈ APR). Sales tax is applied to the monthly payment, and the acquisition fee is rolled into the capitalized cost. Estimates for education only; dealer fees and state tax rules vary. This is not financial advice.