Want a new car with a fixed monthly number and zero resale headaches? That is why closed-end leases are hot in 2025. Payments are predictable, budgeting is simple, and you hand back the car at the end without worrying about market prices.
A closed-end lease is a contract where you agree to a set term, mileage limit, and payment, then return the car with no buyout required. Unless you decide to purchase it through a car lease buyout loan at the end of the term.
Here is what you will learn today: key lease terms, how monthly payments are built, a quick example you can copy, and smart ways to cut costs. Numbers vary by state and lender, so use this as a guide. Good news, digital tools and calculators make modeling your payment faster than ever.
Closed-End Lease Cost Basics: What Drives Your Monthly Payment
Every lease payment has a few core pieces. Once you know them, the math clicks. Think of your payment like two buckets, one bucket for the car losing value while you use it, and one bucket for the finance cost.
Start with the capitalized cost. This is the price the lease uses after discounts, fees you roll in, and any credits. Next is the residual value, which is the car’s agreed value at the end of the lease. The difference between these two numbers is your depreciation. That is the part you are paying for as you use the car.
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Then there is the money factor, a small decimal that acts like the interest rate for the lease. It creates the rent charge, which is the finance part of your payment, and ties directly into broader car finance options that lenders use to structure offers.
Most leases also include fees. Some get paid upfront, some get rolled into the cap cost. If you roll them in, your payment goes up because you are financing them. Taxes sit on top of the monthly base in many states, although rules vary.
In 2025, typical money factors land around 0.0010 to 0.0020 for mainstream offers, and residuals for 36 months often sit near 50 to 60 percent of MSRP. Acquisition fees usually fall between 250 and 1,000 dollars.
Disposition fees are often 300 to 500 dollars at lease end. Mileage limits of 12,000 to 15,000 miles per year are common, with excess miles costing about 20 to 30 cents each. These ranges help you sanity check a quote before you sign.
Key Terms You Must Know Before You Model Costs
l Capitalized cost (cap cost): The final price your lease is based on after discounts and rolled-in fees.
l Capitalized cost reduction: Upfront credits or cash that lower the cap cost.
l Residual value: The agreed value of the car at lease end.
l Depreciation: Cap cost minus residual value.
l Money factor: The lease interest rate shown as a small decimal.
l Rent charge: The finance cost created by the money factor.
l Lease term: The number of months in the lease.
l Mileage cap: The annual miles allowed without extra fees, often 10,000 to 15,000.
l Wear and tear rules: Standards for damage and tire condition at turn-in.
l Taxes and fees: State and local charges plus lender and dealer fees.
How a Closed-End Lease Payment Is Built
Your monthly payment usually equals the depreciation fee plus the rent charge, then taxes, plus any fees you rolled in.
l Depreciation fee: (Cap cost minus residual) divided by months.
l Rent charge: (Cap cost plus residual) times money factor.
l Taxes: Often charged on the monthly payment, rules vary by state.
l Drive-off: Can include the first payment, registration, and acquisition fee.
When fees are rolled into the cap cost, your cap cost rises, so both depreciation and rent charge increase. That is why getting fees out of the cap cost, when possible, helps.
Typical 2025 Fees and Charges to Expect
l Acquisition fee
l Doc, title, and registration fees
l Possible security deposit
l State and local taxes
l Optional add-ons (protection packages, service plans)
End-of-lease items include:
l Disposition fee
l Excess mileage charges (per mile)
l Excess wear and tear costs
Ask if GAP coverage is included. Many leases include it, and it protects you if the car is totaled or stolen. Fee amounts vary by brand and lender, so confirm in writing.
| Fee or Charge | Typical 2025 Range |
| Acquisition fee | $250 to $1,000 |
| Disposition fee | $300 to $500 |
| Excess mileage | $0.20 to $0.30 per mile |
| Money factor | 0.0010 to 0.0020 |
| Residual (36 months) | 50% to 60% of MSRP |
Conclusion
Modeling a closed-end lease is simple once you know the parts. The payment equals depreciation plus rent charge, then taxes and any rolled-in fees. Build your numbers, test a few cases, and you are in control.
Use a quick spreadsheet before you visit the dealer. You will spot a fair deal fast and feel confident signing a lease that fits your budget.
