Lease vs. Buy Car Calculator



 
 

Lease Vs. Buy Car Calculator

Use this lease vs. buy calculator to figure the best deal on your next car. Simply compare your total costs of leasing vs. buying over the term of the arrangement.

This lease or buy calculator estimates costs including "lost interest" due to initial expenses like the down-payment. It also calculates your estimated monthly lease payment and your monthly loan payment for comparison.

Simply enter the data then click "Calculate Lease vs Buy" to arrive at cost figures.

Description (A) Lease: (B) Loan: Instruct/Explain
1. Purchase price:
2. Sales tax rate:
3. Fees:
4. Cash Down payment:
5. Net Trade-in allowance:
>6. Rebates:
7. Term (in months):
8. Interest rate (APR):
9. Monthly payment:
10. Security deposit:
11. Estimated resale value:
12. Annual savings rate:
13. Year #/% Deprec. 1 2 3 4 5 6 7 8 9 10
Description (A) Lease: (B) Buy: Instruct/Explain
14. Monthly payment:
15. Total of payments:
16. Total interest expense:
17. Net up-front expenses:
18. Depreciation expense:
19. Forgone Interest earnings:
20. Total cost:
21. Average cost per year:

Should You Buy Or Lease Car?

Which is best, lease or buy? There is no right or wrong answer to this question. The answer entirely depends on your needs and your circumstance. For both options, there are several advantages and disadvantages. It is important that you carefully assess your needs and your financial situation before making a decision. Do some research and compare the cost of buying and leasing using the lease vs. buy car calculator and see which strategy works best for your needs.

Assess Your Needs

When making a decision to buy or lease a car, start by evaluating your needs. Next step is review your budget and calculate how much you can afford to pay every month. The following questions will guide you in evaluating your situation.

  • Do you have enough money for paying down payment?
  • Is the car you want to drive too expensive for your budget?
  • Are you looking for a car with a very low monthly payment?
  • How often do you change your car?
  • What is your driving habit?
  • Do you intend to use your car for long distance trips?
  • Do you worry about the resale value of your car?
  • Do you trust the company where you will be leasing the car?

Pros Of Leasing

  • Leasing a car gives you the luxury of driving different car models every few years when your lease term is over.
  • You need not worry about major car repair since your lease will remain under warranty by the car leasing company.
  • In some instances, the monthly car leasing payment is cheaper than the monthly loan repayments for buying a new car.
  • The sales tax you pay for leasing will be low compared to buying a car.

Cons Of Leasing

  • In some markets, lease is more expensive and the initial payments are high. In this case, you need to shop around to get the best deal.
  • The cost pre-terminating the lease can be costly. Before you lease car, make sure you know until when you will be using it to avoid the pre-termination cost.
  • There are mileage restrictions in car leasing. Therefore, if you often drive long distances and exceed the mileage limit, you will end up paying more for your lease.
  • You cannot modify or change the car as you please.

Pros And Cons of Buying A Car

If you can afford to shell out money monthly for at least 20% of your income, then buying a car might be the best option for you. Buying a car will require a large down payment and most car buyer usually takes up a loan for usually 5 years. Unless you have so much money, your chances of changing your car will only be after 5 years. Your driving habits will also tell you if buying a car is better than leasing. If you drive more than 12,000 to 15,000 per year then you better choose buying.

Though buying a car will save you from worries of the wear and tear of your vehicle but in case of major maintenance, you need to shoulder the expenses. The older your car, the higher is the cost of repairs and maintenance. Another disadvantage is the value of your car depreciates as time goes by. Once you completed your loan payment, the value of your car will go down, thus the resale value will decrease just when you are ready to change it.

Summary

To summarize, buying or leasing a car will greatly depend on your financial status, your driving habits and your reasons for needing a vehicle. So before you decide whether to buy or lease a vehicle, evaluate your needs and your long-term plans. Calculate which option is best for you using the lease vs. buy car calculator above and check that is the best option that suits your needs.

Buy Or Lease Terms And Definitions

  • Lease – An agreement whereby the party grants the use of property or services to another for a specific period time.
  • Purchase price – The total amount you pay for goods or services.
  • Security Deposit – The amount held by the lessor to cover damages caused by the lessee for the rented property.
  • Rebates – A portion of the money returned to the buyer due to promotions.
  • Depreciation Expense – The reduced value of an asset.
  • Resale Value – The market value of the property.
  • Forgone Interest Earning – The interest lost if a certain amount of money is invested.
  • Interest Expense – The total amount you paid for interest.
  • Trade-in Allowance – The value of the property used as part payment of a purchase.

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