Lease & Rent Calculator
Calculate monthly lease payments, total rent over tenure, and compare lease vs buy scenarios.
About this calculator
The Lease & Rent Calculator works out the monthly payment on a lease of a vehicle, machine or other asset. A lease charges you for two things: the value the asset loses while you use it (depreciation) and a finance charge on the money tied up in it. The tool shows both separately, then the monthly lease and the total you will pay over the term.
Enter the asset value, any down payment, the residual value you expect at the end of the lease, the annual rate and the term in months. The residual value matters more than most people expect: the higher the residual, the less depreciation you pay for, so the lower the monthly payment.
How to use it
- Enter the Asset Value.
- Enter the Down Payment, or 0 if none.
- Enter the Residual Value at End, the estimated worth when the lease finishes.
- Enter the Annual Interest Rate and the Lease Term in months.
- Press Calculate Lease and compare the monthly lease with an EMI for buying.
Tips and common mistakes
- Always ask how the residual value was set. A low residual makes the lease more expensive.
- Check mileage or usage limits and the charges for exceeding them.
- At the end of a lease you own nothing unless there is a purchase option. Compare with a loan on the same asset.
- Ask whether insurance, maintenance and taxes are included in the lease rental.
Frequently asked questions
What is residual value?
It is the estimated worth of the asset at the end of the lease. You pay for the difference between the starting value and the residual.
How is a lease different from a loan?
With a loan you pay for the whole asset and own it. With a lease you pay only for the use of it during the term.
Why does a higher residual lower my payment?
Because you are paying for less depreciation. The finance charge rises slightly, but the depreciation saving is larger.
Is the finance charge the same as the interest rate?
It is calculated from the rate but charged on the average value of the asset, which is why the formula uses net cost plus residual.
Can I buy the asset at the end?
Many leases include a purchase option at the residual value. Check the contract.
Does the calculator include taxes?
No. Add any GST or other taxes to the asset value if they are financed.