Quick answer: A 150,000 car with 15,000 down, 1,500 in fees, a 55% residual and 6% APR (money factor 0.0025) over 36 months costs 2,047.50 a month before VAT, or 2,149.88 with 5% VAT.
How it's calculated
Net cap cost = agreed price + fees added to the lease − down payment − trade-in. The residual is the car's expected value at the end, set as a percentage of the price.
Monthly payment = depreciation + rent charge. Depreciation = (net cap cost − residual) ÷ months; rent charge = (net cap cost + residual) × money factor. The money factor is the APR ÷ 2,400, so 6% APR is 0.0025.
VAT applies to each lease payment (5% in the UAE, 15% in Saudi Arabia). Ijara ending in ownership, common in the Gulf, is priced with a profit rate and an end payment instead; for that, use the lease calculator or compare with buying in the car loan calculator.
Worked examples
- Net cap cost 136,500, residual 82,500, 36 months: depreciation = 54,000 ÷ 36 = 1,500.00
- Rent charge at MF 0.0025: (136,500 + 82,500) × 0.0025 = 547.50
- Payment with 5% VAT: 2,047.50 × 1.05 = 2,149.88; total cost 92,395.50
Frequently asked questions
What is a money factor?
The lease's finance charge written as a small decimal. Multiply it by 2,400 to get the approximate APR: 0.0025 is about 6%.
Does a higher residual lower the payment?
Yes. A higher residual means less depreciation to pay during the lease, though it slightly raises the rent charge.
Is a large down payment a good idea on a lease?
It lowers the payment, but if the car is written off early the down payment is usually not refunded. Many advisers suggest keeping it small.
Who owns the car at the end of a lease?
The leasing company, unless you buy it. You usually hand it back or pay the agreed residual value to keep it.
What is a net cap cost?
The amount the lease is based on: the agreed price plus added fees, minus the down payment and trade-in. A lower figure means a lower payment.
Are there extra charges at the end of a lease?
Often, yes: over-mileage, excess wear or early return. Read the contract's limits before you sign, as this calculator doesn't include them.