Depreciation plus rent
A closed-end US auto lease charges for the value the car is expected to lose, plus a rent charge based on capitalized cost and residual. Residual is commonly quoted as a percent of MSRP, not of the selling price. Dealers often multiply money factor by 2,400 for a rough APR comparison, but federal guidance says there is no mandatory standardized lease-rate formula. An auto-loan page amortizes a purchase; this page estimates a residual lease.
Residual = MSRP × residual percent
Monthly depreciation = (capitalized cost − residual) ÷ months
Monthly rent = (capitalized cost + residual) × money factor
Base payment = monthly depreciation + monthly rent
Monthly payment = base payment × (1 + tax rate)
Approximate APR convention = money factor × 2,400
Example
A $45,000 MSRP car negotiated to $42,000, 60% residual, money factor 0.00125, and 36 months has a $27,000 residual and a $42,000 capitalized cost. Depreciation is $416.67 a month and rent is $86.25, so the pretax base is about $502.92. A 0% tax rate leaves that as the payment; the money-factor conversion is about 3%.
Tax, mileage, and fees
Some states tax each monthly payment, some tax amounts due at signing, and some mix both. Enter only the rate that applies to the monthly base in the quote. Put acquisition or other fees in the fee field only when they are rolled into capitalized cost. Registration and other due-at-signing charges, disposition fees, excess mileage, and wear remain outside this monthly estimate. A promotional 0 money factor is allowed and makes rent $0.