MulticalcAuto Lease Calculator
Enter vehicle details to calculate your monthly lease payment and total cost.
Lease Details
Enter lease details to see monthly payment.
Lease Payment Calculation Formula
Monthly Payment Formula
Formula:
Monthly = Depreciation + Finance
Depreciation = (Cap Cost - Residual) / Months
Finance = (Cap Cost + Residual) × MF
Key Variables
Important Terms:
Cap Cost = Negotiated Price - Down
Money Factor = APR / 2400
Residual = MSRP × Residual %
Example Calculation:
Scenario: Car MSRP ₹15,00,000, negotiated at ₹14,00,000, 50% residual, 5% APR, 36-month lease
Residual Value = ₹15,00,000 × 50% = ₹7,50,000
Net Cap Cost = ₹14,00,000 (no down payment)
Money Factor = 5% / 2400 = 0.00208
Depreciation = (₹14,00,000 - ₹7,50,000) / 36 = ₹18,055/month
Lease vs Buy Comparison
Understanding the differences between leasing and buying:
| Aspect | Leasing | Buying |
|---|---|---|
| Monthly Payment | ₹10,000-25,000 (typical) | ₹15,000-50,000 (EMI) |
| Maintenance | Covered (Warranty) | Your responsibility |
| Mileage Limit | Yes (12,000-15,000 km/year) | Unlimited mileage |
| Residual Risk | Dealer bears it | You bear depreciation loss |
| Ownership | No ownership | Full ownership & asset |
| Early Termination | Heavy penalties | Can sell anytime |
Understanding Lease Terms
Key Lease Components
- Cap Cost: Amount being financed (after down payment)
- Residual Value: Car's estimated worth at lease end
- Money Factor: Finance charge (like interest rate)
- Depreciation Fee: Cost of vehicle usage
- Finance Fee: Cost of financing the lease
Lease Advantages
- Lower Payments: 30-60% lower than buying
- New Cars: Latest models with warranty
- No Repairs: Warranty covers maintenance
- No Depreciation: Dealer bears residual risk
- Easy Upgrade: New car every 2-3 years
Real-World Auto Lease Examples
Example 1: Budget Sedan Lease
Scenario: Maruti Baleno with MSRP ₹8,50,000, negotiated at ₹8,00,000, 50% residual, 5% APR, 36-month lease
Calculation:
- Residual Value: ₹8,50,000 × 50% = ₹4,25,000
- Net Cap Cost: ₹8,00,000
- Monthly Payment: ≈ ₹10,600
- Total Lease Cost: ≈ ₹3,81,600 (includes residual)
Warranty covers all maintenance; mileage limit: 12,000 km/year
Example 2: Mid-Range SUV Lease
Scenario: Hyundai Creta with MSRP ₹12,00,000, negotiated at ₹11,20,000, 50% residual, 6% APR, 36-month lease
Calculation:
- Residual Value: ₹12,00,000 × 50% = ₹6,00,000
- Down Payment: ₹2,00,000
- Net Cap Cost: ₹9,20,000
- Monthly Payment: ≈ ₹12,850
Good option for buyers wanting latest features without ownership
Example 3: Premium Sedan Lease
Scenario: BMW 3 Series with MSRP ₹40,00,000, negotiated at ₹37,50,000, 55% residual, 4.5% APR, 48-month lease
Calculation:
- Residual Value: ₹40,00,000 × 55% = ₹22,00,000
- Down Payment: ₹5,00,000
- Net Cap Cost: ₹32,50,000
- Monthly Payment: ≈ ₹35,600
Premium leases offer luxury without ownership commitment
Example 4: Long-Term Commercial Vehicle Lease
Scenario: Commercial Van with MSRP ₹18,00,000, negotiated at ₹16,50,000, 45% residual, 5.5% APR, 60-month lease
Calculation:
- Residual Value: ₹18,00,000 × 45% = ₹8,10,000
- Down Payment: ₹3,00,000
- Net Cap Cost: ₹13,50,000
- Monthly Payment: ≈ ₹11,850
5-year commercial leases provide flexibility for businesses
When to Use Lease Calculator
Leasing Makes Sense When:
- ✓ You drive 12,000-15,000 km annually
- ✓ Want latest car models every 2-3 years
- ✓ Prefer predictable monthly costs
- ✓ Avoid maintenance & repair hassles
- ✓ Don't need ownership equity
Buying Makes Sense When:
- ✓ Drive 20,000+ km annually
- ✓ Keep cars for 7+ years
- ✓ Want unlimited customization
- ✓ Build vehicle equity
- ✓ Need off-road capability
Frequently Asked Questions
Capitalized cost (cap cost) is the net amount you're financing in a lease. It equals the negotiated
price minus any down payment. For example, if you negotiate a car for ₹10 lakhs and put ₹1 lakh
down, your cap cost is ₹9 lakhs. This cap cost, along with the residual value and money factor,
determines your monthly payment. A lower cap cost results in lower monthly payments, so negotiating
the best price is crucial.
Most leases include a mileage limit (typically 12,000-15,000 km/year). If you exceed this, you pay
overage charges, usually ₹3-5 per extra km. For example, if your limit is 36,000 km for a 3-year
lease and you drive 50,000 km, you owe ₹56,000-70,000 in overage fees. Some leases offer higher
mileage limits at a slightly higher monthly cost. If you drive a lot, negotiate a higher mileage
allowance upfront.
Residual value is the car's estimated worth at lease end (typically 50-60% of MSRP). A higher
residual value means lower monthly payments because you're financing less depreciation. For example,
a car with 55% residual is cheaper to lease than one with 50% residual. Residual value depends on
brand reputation, reliability, and market demand. Brands that hold value well (like Toyota, Honda)
have higher residuals and lower lease payments.
Money factor is the financing charge on a lease (similar to interest rate). It equals APR divided by
2400. For example, 5% APR = 0.00208 money factor. Multiply this by the average cap cost and residual
to get monthly finance fee. Money factor varies based on credit score, lease company, and market
conditions. Better credit scores get lower money factors. Even small differences in money factor
significantly impact total lease cost over the term.
When returning a leased car, you may face: (1) Excessive mileage charges (₹3-5/km over limit), (2)
Wear & tear charges (dents, scratches, stains), (3) Mechanical issues beyond normal wear, (4)
Missing equipment (floor mats, spare tire). Normal wear is usually acceptable. If you maintain the
car well and stay within mileage, charges are minimal. Gap insurance (often included) covers
difference between loan value and actual value if car is totaled.
Yes, you can terminate early but face penalties. Early termination charges vary but typically
include: remaining payments, disposition fee (₹20,000-50,000), excess mileage charges, and wear/tear
fees. Total early exit can cost ₹2-5 lakhs depending on months remaining. Some leases allow "lease
transfers" (assuming) where another person takes over payments, potentially avoiding penalties. Read
lease agreement carefully regarding exit clauses.
Maintenance is typically included in leases (covered under warranty). However, insurance is usually
NOT included—you must buy comprehensive coverage separately. The lease agreement specifies which
repairs are covered (routine maintenance, parts failures) and what aren't (accident damage,
wear/tear). You pay for fuel, registration, and insurance out-of-pocket. Gap insurance (covers
difference if car is totaled) is often included or available at extra cost.
Leasing and car rental are different. Car rental is short-term (days/weeks) for temporary use.
Leasing is long-term (2-4 years) with fixed monthly payments and mileage limits. Leases build brand
loyalty (dealer benefits) and include warranty coverage. Rentals offer flexibility with higher daily
costs. Leases have strict terms and penalties for damage/mileage overages. Rentals are more casual
and flexible. Leasing suits regular commuters; rentals suit travelers/temporary needs.
Lease Shopping Tips
- Negotiate price first; lowest cap cost = lowest payment
- Higher residual value = lower monthly payment
- Compare money factors across dealers
- Calculate total cost including mileage overages
- Ensure insurance & gap coverage in lease terms
- Review wear & tear policy before signing
Important Disclaimer
This auto lease calculator is for estimation purposes. Actual lease payments vary based on dealer policies, credit scores, taxes, and market conditions. Money factors differ by dealership and credit profile. Always verify quotes with dealers and read lease agreements carefully.Learn More
Lease Concepts:
- Capitalized Cost (Cap Cost)
- Money Factor vs APR
- Residual Value
- Mileage Limitations