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Leasing Calculator
Work out the monthly payment on a lease, and what the balloon at the end really costs you.
Enter the price, rate and term, then press Calculate.
Results are informational. Calculation is based on your input and public rules, official accounting may differ. For accuracy, confirm the final result if needed from the appropriate official source or specialist.
How it works?
A lease splits the price of a car into three parts: what you pay up front, what you pay monthly, and what is still owed at the end. That last part — the residual value, or balloon — is what makes a lease different from a loan, and what makes the monthly payment look small.
Only the difference between the financed amount and the present value of the residual is repaid over the term. In formula terms, the monthly payment is [financed − residual ÷ (1 + r)n] × r ÷ (1 − (1 + r)−n), where r is the monthly interest rate and n the number of months. The residual keeps accruing interest the whole time, which is why a lease with a large balloon costs more overall than one without.
At the end you either pay the residual and keep the car, or hand it back. The calculator shows both totals, because a quote that only names the monthly payment tells you neither.
Frequently asked questions
Why is the monthly payment lower than on a loan for the same car?
Because you are not repaying the whole car. The residual value stays outstanding for the entire term and falls due as one payment at the end. A loan repays the full price, so nothing is left owing — and the monthly figure is correspondingly higher.
What happens at the end of the lease?
You pay the residual value and the car becomes yours, refinance that amount into a new agreement, or hand the car back. Handing it back usually comes with mileage and condition terms, so read what the contract counts as normal wear.
Does a bigger down payment save money?
Yes, but less than it feels. A down payment reduces the financed amount, so it cuts both the monthly payment and the interest. It does not touch the residual value, which keeps accruing interest regardless. Lowering the residual saves more interest than raising the down payment by the same amount.
Is the interest rate the only cost?
No. Leases usually add a contract fee, and often require comprehensive insurance for the whole term. Those sit outside this calculation. Compare offers on the annual percentage rate and the total, not the monthly payment, since the monthly figure can be made to look like anything by moving the residual.
How do I pick a realistic residual value?
The leasing company sets it, based on what it expects the car to be worth. As a sanity check, a new car typically keeps roughly 50–60% of its value after three years and 40–50% after four, with more for models that hold value well. If the residual in an offer looks high, the monthly payment is low for a reason.