How this calculation works
Calculate the assumed residual amount from adjusted capitalized cost and the entered percentage. Spread the depreciation difference over the term and add a monthly rent charge based on cost plus residual. The result separates both components, their total and the sum of base payments, without silently including a buyout.
Base payment = (adjusted cost−residual)/months + (adjusted cost+residual)×money factorA worked example
Adjusted cost 25,00,000 and 55% residual give residual 13,75,000. Over 36 months depreciation is 31,250 per month. At money factor 0.0035, the rent-charge component is 13,562.50, giving base monthly payment 44,812.50 before excluded charges.
Good to know
Base money-factor convention only. Enter adjusted capitalized cost after reductions you intend to include. No automatic tax, acquisition/disposition fee, registration, deposit, insurance, mileage, wear, early termination or buyout. Money factor multiplied by 2,400 is a conventional comparison figure, not a certified lease APR.
Reference: Federal Reserve: vehicle leasing terms and rent charges (opens in a new tab) ↗
A lease payment is not simply a loan EMI on the full price
The depreciation component spreads the modeled reduction in value over the term. The rent-charge component uses both the starting cost and residual through a money factor. The total is therefore built differently from a standard fully amortizing loan payment. A residual amount remains a contract assumption, not a guaranteed resale valuation.
The equipment lease payment model calculator exposes two loan-like residual conventions for a different comparison. Do not paste the money factor into its annual-rate field. The model names and units matter more than whether two calculated monthly numbers happen to look similar.
Start with the adjusted cost and review excluded cash
A negotiated price can be adjusted by capitalized fees, reductions, rebates or trade-in amounts. This page expects that adjusted amount as its input rather than attempting to infer it from a vehicle name. Cash already used to reduce the cost should not be subtracted again elsewhere in this formula.
The base-payment total does not mean you own the vehicle after the final payment. Return conditions, mileage, wear, deposits and purchase options belong to the contract. A conversion of money factor into a familiar annual comparison can aid discussion, but it does not turn all lease charges into a legal loan APR.
A few questions, answered
Is the money factor entered as a percentage?
No. Enter its small decimal value, such as 0.0035.
Does the total base-payment amount include buying the vehicle?
No. A buyout or return charges are separate contract items and are not included.