What the numbers mean
- MSRP
- The sticker price, options included. The residual is a percentage of it, even when you pay less for the car.
- Selling price (capitalized cost)
- The price you agree on. It's the number you negotiate on a lease too: every $1,000 off is typically about $28–30 a month less on a 36-month lease, before tax.
- Residual
- What the lender expects the car to be worth at the end, as a percentage of MSRP. It's set by the lender for the term and yearly miles, not by the dealer. A higher residual means a lower payment.
- Money factor
- The lease's interest rate written as a small decimal. Multiply by 2,400 for a rough APR: 0.00175 is about 4.2%. Dealers can add to the lender's base rate (the buy rate), so ask for it in writing.
- Depreciation and rent charge
- The payment has two parts: the value you use up, (capitalized cost − residual) ÷ months, and the rent charge, (capitalized cost + residual) × money factor.
- Cap cost reduction
- Cash down, rebates and trade-in equity that lower the capitalized cost. Money put down on a lease is usually gone if the car is stolen or totaled, which is why many people keep it small.
- Fees
- The acquisition fee is the lender's charge to start the lease and is often rolled into the payment. The doc fee is the dealer's paperwork charge, capped by California law. The disposition fee is charged at the end if you hand the car back.
- Sales tax on a California lease
- Tax is charged on each monthly payment rather than on the whole price, plus tax at signing on money down and rebates. The rate is the one where the car will be registered.
- Due at signing
- The first payment plus cash down, the tax on it, fees paid up front and registration. "$0 down" ads usually still have an amount due at signing.
- Security deposits
- Some lenders let you pay refundable deposits up front in exchange for a lower money factor.
Checking a dealer's quote
- Ask for the selling price, MSRP, residual, money factor, term, miles per year and every fee, in writing.
- Enter them, switch to "Check a dealer quote" and put in the quoted payment and due at signing.
- If the implied money factor is higher than the one on the quote, something else is in the payment: a higher rate, an add-on or a fee you weren't shown. Ask about it.
Estimate only, not an offer. Based on typical residuals and rates in public lender reports; the dealer and lender set the real terms, which depend on your credit, fees, taxes and the month's programs. Typically within about 10 % of what people actually paid. This calculator is general information, not financial advice.
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