Lease Residual Value Calculator
Estimate a car’s lease-end residual value and the depreciation you pay from MSRP, residual percent and term.
How it works
Residual value = MSRP × residual% · Depreciation = MSRP − residual · Monthly depreciation = depreciation ÷ term
The residual value is the leasing company’s prediction of what the car will be worth at the end of the lease, quoted as a percentage of the MSRP. It is the single biggest lever in a lease: the depreciation you pay for is just the gap between the MSRP and that residual, spread across the term. A high residual means the car holds its value, so there is less depreciation to pay and a lower monthly payment — which is why cars with strong resale reputations often lease cheaply. This figure is the depreciation portion only; a real lease payment also adds a finance (rent) charge set by the money factor.
Worked example
A $40,000 car with a 55% residual over 36 months is projected to be worth $40,000 × 0.55 = $22,000 at lease-end. The depreciation you cover is $40,000 − $22,000 = $18,000, or about $500 a month before finance charges.
Frequently asked questions
What is a good residual value for a lease?
Higher is better for the lessee. Over a 36-month lease, residuals in the mid-50s to low-60s as a percent of MSRP are strong; anything much lower means steep depreciation and a higher payment.
Does a higher residual make the lease cheaper?
Yes — the depreciation you pay is MSRP minus residual, so a higher residual shrinks that gap and lowers the monthly payment, all else equal. It also raises the buyout price if you decide to purchase the car at the end.
Is the residual the price to buy the car at lease-end?
Usually yes. Most leases let you buy the car for its residual value (sometimes plus a fee) when the lease ends, which can be a bargain if the car’s market value ends up higher than the residual.
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Educational estimate. Real-world results vary with conditions, tuning and measurement.