Protection packages and similar items rolled into the cap cost.
Example estimate. Your DMV sets this.
Prefilled from the state rule; edit if yours differs.
City/county add-on. 0 if none.
Rolled in = higher payment, less due at signing.
Charged when you turn the car in, if any.
Charge per mile over the allowance.
Compare with buying
Example 7.54% (Fed G.19, August 2026).
Months of loan payments.
Blank = the residual.
Show the math
Total lease cost $19,461.69 · Equivalent APR 5.93%
From the dealer desk (facts only)
Money factor markup. The lender's rate for your credit and term is the buy rate; the money factor on the worksheet can be that or higher, and a federal lease disclosure shows dollars, not the money factor (Federal Reserve: "The money factor typically is not disclosed to you"). Sources: Fed: rent charge, Fed leasing FAQ, and for the buy rate and optional dealer markup the Fed's description of dealer-arranged auto loans: Fed 2023. We found no official lease-specific markup figure, so none is shown.
The residual is set by the lessor. The Fed: it is "the assigned value of the vehicle at the end of the lease", a projection; "Different lessors may assign different residual values to the same vehicle"; more mileage lowers it. Fed: residual value
Acquisition fee. It is "either paid at lease signing or included in the gross capitalized cost"; it can also be called a bank, administrative or assignment fee. If capitalized, it raises the payment and the rent charge. Fed: up-front costs, FAQ 10-11
Disposition fee. "If you return the vehicle, you may be charged a disposition fee"; "Not all lessors charge a disposition fee." The amount is in your contract. Fed: disposition fee
Excess mileage. Allowances are "often an average of 12,000 or 15,000 miles per year" (Fed); the FTC says "the annual mileage limit in most standard leases is 15,000 or less". The per-mile charge is in your contract. Fed FAQ 4-6, FTC
As of Oct. 20, 2026
Best next step
Next step: ask the dealer for the lease worksheet in writing (selling price, residual, money factor, term, miles and every fee), type those numbers in above, and check that the payment and due-at-signing match. If they don't, the gap is a fee, a markup or a different residual.
The math:
Base payment = (adjusted cap cost − residual) ÷ months + (adjusted cap cost + residual) × money factor; then your state's tax rule.
A best fit for the situation described, not financial advice or a buy/sell recommendation. Partner links never change a pick.
Your roadmap
Get the worksheet in writing.
Match it line by line here, including how tax is collected in your state.
Ask for the buy rate (the lender's money factor) and the residual from the lender.
Compare with buying in the Lease vs buy panel, then read the contract before you sign.
Iowa: how a car lease is taxed
Verified with the state on 2026-10-20
Tax up front on the total of payments, 5%. Iowa charges a one-time 'fee for new registration' on a lease of 6 months or more: 5% of the lease price (total payments plus down payment; rebates excluded) plus $10. The lessor pays it and usually passes it to you.
“$10 plus 5% of the lease price” Iowa Department of Revenue: Vehicle Purchase, Lease and Rental Information; worksheet 35-050; Iowa Code 321.105A · source · checked 2026-10-20
Cash down taxed: yes
Rebates taxed: no
Trade equity taxed (no trade credit): no
Doc fee limit: $180.00 (Iowa Code § 322.19A).
Worked example: Iowa
$40,000 MSRP, $38,000 selling price, 36 months, 12,000 miles, 58% residual, 0.0021 money factor, $2,000 cash down, $1,000 rebate, $695 acquisition fee in the lease, $180.00 doc fee and $400 title/registration at signing, 5% state rate (example inputs, not a quote). Open it in the calculator.
MSRP / selling price
$40,000.00 / $38,000.00
Gross cap cost (+ $695 acquisition fee in the lease)
State lease tax rules: data/lease_tax_states.json, one state revenue or DMV source per state, checked Oct. 20, 2026; see each state page.
Lease math follows the Federal Reserve leasing guide and Regulation M. State tax rules come from state revenue or DMV pages; where we have not verified a state we say so. Facts and arithmetic only.
Tax up front on the total of payments. Iowa charges a one-time 'fee for new registration' on a lease of 6 months or more: 5% of the lease price (total payments plus down payment; rebates excluded) plus $10. The lessor pays it and usually passes it to you.
What is the lease payment on a $40,000 car in Iowa?
With our example inputs ($38,000 price, 58% residual, 0.0021 money factor, 36 months, $2,000 cash down, $1,000 rebate): about $470.76/mo with $3,998.13 due at signing. Your numbers will differ.
How do you calculate a car lease payment?
Base payment = (adjusted cap cost − residual) ÷ months + (adjusted cap cost + residual) × money factor. The adjusted cap cost is the selling price plus fees rolled in, minus cash down, rebates and trade equity. Then add your state's tax: most states tax each payment; some collect it up front.
How do I convert a money factor to APR?
Multiply by 2,400 (0.0025 × 2,400 = 6%); divide an APR by 2,400 for the money factor. It's a rule of thumb; the calculator also solves the exact equivalent APR from the payments and residual.
Estimates, not financial advice. Taxes, insurance, PMI and fees vary by lender, county and city; confirm with your lender, dealer and state agency before acting.