Car Leasing Calculators
Lease residual value effect.
A higher residual value means the car is expected to be worth more at lease end, so you pay for less depreciation and the monthly payment drops. Enter the MSRP and the residual percentage from your quote to get the residual in dollars, the payment, and what each 5 percentage points of residual is worth. Runs in your browser; nothing is sent or stored.
Lease quote
Residual and payment
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Worked example
MSRP $40,000, residual 60% of MSRP = $24,000. Negotiated price (capitalized cost) $37,000, no cap cost reduction, 36 months, money factor 0.00125. Depreciation = ($37,000 - $24,000) / 36 = $361.11 a month. Rent charge = ($37,000 + $24,000) x 0.00125 = $76.25 a month. Payment = $437.36 before tax. At a 65% residual ($26,000) the payment would be $384.31, $53.06 lower; at 55% it would be $490.42, $53.06 higher.
How it works
Residual = MSRP x residual %. Adjusted cap cost = negotiated price - cap cost reduction. Depreciation per month = (adjusted cap cost - residual) / term. Rent charge per month = (adjusted cap cost + residual) x money factor. Payment = depreciation + rent charge. A higher residual cuts the depreciation part by residual change / term but raises the rent charge by residual change x money factor, so the net effect per dollar of residual is (1 / term - money factor), which is positive for normal money factors.
Regulation M (12 CFR 1013.4) lists the terms a lessor must disclose: the gross capitalized cost, the adjusted capitalized cost (“the amount used in calculating your base periodic payment”), the residual value (“the value of the vehicle at the end of the lease used in calculating your base periodic payment”), depreciation and any amortized amounts, and the rent charge. The rent charge formula using a money factor is an industry convention rather than something Reg M defines, and lessors may build payments differently. For a money factor to APR conversion and a lease vs buy comparison, see the money factor calculator.
Sources and basis (opened 2026-10-08): Cornell Legal Information Institute, “12 CFR 1013.4, Content of disclosures”; Federal Trade Commission, Consumer Advice, “Financing or Leasing a Car”. Reg M is quoted for the definitions of adjusted capitalized cost, residual value, depreciation and rent charge; the FTC article for the idea that a lease payment covers expected depreciation plus a rent charge, taxes and fees.
Not financial advice. This is a planning estimate from the numbers you type. Taxes, fees, insurance and lender or lessor terms vary; confirm every figure against your contract or written quote.
FAQ
What is residual value on a car lease?
It is the value of the vehicle at the end of the lease used in calculating your base payment, per Regulation M. It is set in the contract, usually as a percentage of MSRP, and is not a guarantee of what the car will actually be worth.
Is a higher residual value better on a lease?
It lowers the monthly payment because you pay for less depreciation. It also usually means a higher buyout price if the lease lets you buy the car. The payment is only part of the picture.
Can I negotiate the residual value?
It is written into the lease, so ask the dealer whether it is fixed. The price (capitalized cost), money factor and fees are the other numbers to compare; ask for the residual and money factor in writing.
How much does 1 point of residual change the payment?
In the worked example about $10.61 a month, but it depends on MSRP, term and money factor. The tool computes it for your numbers.
Does residual percentage mean percent of the price I pay?
On most quotes it is a percentage of MSRP, not of the negotiated price. Confirm the base on your quote; enter the dollar residual as a percentage of the MSRP you enter here.