Home › Tools › Auto lease calculator › Tennessee

Tennessee car lease calculator

Monthly payment
$475.04 /mo
Due at signing$3,573.25

1State
2Car
3Deal
Deal check
Fees & extras

Compare with buying

Show the math

Total lease cost $20,220.44  ·  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

Which lenders are pushing auto loans and leases right now?

VaultRubric Pro's auto lender tracker shows which banks and credit unions are growing auto lending, from FDIC, NCUA and HMDA data, so you know where to ask for a buy-rate quote.

Try Pro free for 7 days

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.

Sources: Fed: rent charge; Regulation M 213.4; Tennessee source

A best fit for the situation described, not financial advice or a buy/sell recommendation. Partner links never change a pick.

Your roadmap

  1. Get the worksheet in writing.
  2. Match it line by line here, including how tax is collected in your state.
  3. Ask for the buy rate (the lender's money factor) and the residual from the lender.
  4. Compare with buying in the Lease vs buy panel, then read the contract before you sign.

Tennessee: how a car lease is taxed

Verified with the state on 2026-10-20

Tax on each payment (Tennessee single-article rules), 7% plus your local rate. Tennessee taxes lease payments at 7%, plus your local rate on the first $1,600 and 2.75% single-article tax on the next $1,600. A cash down payment counts as an up-front lease payment (taxed first, so it uses up the local and single-article bands).

“The state sales tax rate of 7.00% applies to all lease payments under the lease contract.”
TN DOR SUT-43; TN Automotive Dealership Manual (single article applies to lease payments); TCA 67-6-102 (sales price = total consideration) · source · checked 2026-10-20

Doc fee limit: none found in our check (see doc fees by state).

Worked example: Tennessee

$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, $499.00 doc fee and $400 title/registration at signing, 7% state rate + 2.25% local (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)$38,695.00
Cap cost reduction ($2,000 cash + $1,000 rebate)$3,000.00
Adjusted cap cost$35,695.00
Residual (58% of MSRP)$23,200.00
Depreciation ÷ 36$347.08
Rent charge × 0.0021$123.68
Base payment$470.76
Tax: Tax on each payment (Tennessee single-article rules)$32.95/mo
Monthly payment$503.71
Due at signing$3,602.66
Total lease cost$21,252.56

Tennessee details (TN Department of Revenue)

“The state sales tax rate of 7.00% applies to all lease payments under the lease contract. With the local option single article sales tax limitation, only the first $1,600 in lease payments are subject to the local option sales tax, at the applicable local tax rate. The state single article sales tax then applies to the remaining lease payments between $1,600.01 and $3,200, at a tax rate of 2.75%.”
TN DOR SUT-43 · source

“For leases on which the lessee will make periodic (e.g., weekly or monthly) payments, sales tax is to be collected on each lease payment at the time each payment is made.”
TN DOR Sales and Use Tax Manual (June 2025), ch. 4 · source

“If the leased equipment is determined to be a single article, then the tax rate is applied to the lesser of the first $1,600 of the rental flow from a single article or the per unit rental cost of the single article.”
TN DOR Sales and Use Tax Manual (June 2025), ch. 9 · source

Unsettled in TN DOR text: SUT-43 spreads local and single-article tax over the first payments; a 2022 DOR flyer says to charge them on payment 1 (same total). Whether a cash down payment is taxed is not addressed; it is not taxed here. Check your contract.

Lease tax by state

AlabamaAlaskaArizonaArkansasCaliforniaColoradoConnecticutDelawareDistrict of ColumbiaFloridaGeorgiaHawaiiIdahoIllinoisIndianaIowaKansasKentuckyLouisianaMaineMarylandMassachusettsMichiganMinnesotaMississippiMissouriMontanaNebraskaNevadaNew HampshireNew JerseyNew MexicoNew YorkNorth CarolinaNorth DakotaOhioOklahomaOregonPennsylvaniaRhode IslandSouth CarolinaSouth DakotaTennesseeTexasUtahVermontVirginiaWashingtonWest VirginiaWisconsinWyoming

Sources & as-of dates

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.

FAQ

How is a car lease taxed in Tennessee?

Tax on each payment (Tennessee single-article rules). Tennessee taxes lease payments at 7%, plus your local rate on the first $1,600 and 2.75% single-article tax on the next $1,600. A cash down payment counts as an up-front lease payment (taxed first, so it uses up the local and single-article bands).

What is the lease payment on a $40,000 car in Tennessee?

With our example inputs ($38,000 price, 58% residual, 0.0021 money factor, 36 months, $2,000 cash down, $1,000 rebate): about $503.71/mo with $3,602.66 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.