Car Lease Residual Value Calculator
The residual value is the heart of any car lease: it is what the leasing company expects the vehicle to be worth at the end of the term, and it sets both your end-of-lease buyout price and how much depreciation your payments must cover. This calculator takes the starting value (MSRP or agreed capitalized cost) and the residual percentage from your lease quote, then returns the residual value in dollars, the total depreciation over the lease and the monthly depreciation portion for your chosen term. The residual percentage is your input because the lessor sets it.
Lease residual value formula
Residual value = starting value * residual percent / 100
Total depreciation = starting value - residual value
Monthly depreciation = total depreciation / term in months
Depreciation share (%) = total depreciation / starting value * 100
Residual value is the starting value scaled by the residual percentage from your lease. Total depreciation, the value the lease must cover, is the difference between starting and residual values. Dividing by the term gives the monthly depreciation component (before the finance charge).
Lease residual context
- The residual percentage is set by the lessor and varies by model, term and annual mileage allowance.
- A higher residual lowers the depreciation you pay but the finance charge still applies on top.
- The residual value is your contractual buyout price at scheduled lease end.
- Lower mileage allowances typically raise the residual; higher allowances lower it.
- Use the figures from your specific lease quote; this tool never assumes a residual.
Lease residual value: frequently asked questions
What is the residual value on a car lease?
The residual value is the lessor's estimate of what the vehicle will be worth at the end of the lease, expressed as a dollar amount or as a percentage of MSRP. It is the price you could buy the car for at lease end, and it sets how much value the lease must cover through depreciation.
How is residual value calculated?
Residual value equals the MSRP (or agreed capitalized value, as your lease specifies) multiplied by the residual percentage from your lease quote. Total depreciation, the amount the lease must cover, is the starting value minus the residual value.
Why is the residual percentage a user input?
The residual percentage is set by the leasing company (often a captive finance arm) based on its own forecasts and varies by model, term and mileage. There is no universal figure, so you enter the percentage printed on your lease quote rather than the tool guessing it.
Does a higher residual mean a cheaper lease?
Generally yes. A higher residual means less of the car's value depreciates over the term, so the depreciation portion of your payment is lower. The finance (rent) charge still applies on top, so compare the full quote, not the residual alone.
Is residual value the same as buyout price?
The residual is the contractually fixed buyout price at scheduled lease end before any purchase fees. Some leases add a purchase-option fee. This calculator returns the residual value itself; check your contract for any additional end-of-lease purchase fees.
Official sources
- U.S. Federal Reserve, Consumer Compliance Handbook: Consumer Leasing Act (Regulation M).
- U.S. Federal Trade Commission: Financing or Leasing a Car.
Reviewed by the CalculatorHub team, edited by James Graham, 16 June 2026. See our methodology.