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Car Lease vs. Car Buy Calculator

This car loan calculator will help you determine whether it is better for you to lease or buy your chosen auto.

Both leasing and buying have their pros and cons so calculate your monthly payments and the total net cost in order to find out which is the better value for your case.

In order to use this Car Loan Calculator you need to have the SUN's Java™ Plug-in installed.

Seeing this message means that you need to download the SUN's Java™ Plug-in. You can do that automatically if you click on the yellow bar at the top of your browser and choose “Install ActiveX Control” or you could also get the SUN's Java™ Plug-in by visiting this link: Download SUN's Java™ Plug-in

Index of the Used Car Loan Terms:

Term in months: The period of time for your car loan or car lease, expressed in months.
Down payment: This is the amount of money you are willing to put down for your car purchase or car lease. Often when leasing the down payment is referred to as a capital reduction.
Other fees: This includes all other additional fees that have to be paid at the close of the car loan or lease (such as title transfer fees, license, etc.).
Purchase price: The total cost of the car purchase after the manufacturer's rebate (if there is any).
Interest rate: The annual interest rate that will be charged for your car loan or lease.
Sales tax rate: The percentage rate of sales tax that is charged on your car purchase. When leasing, the sales tax is included in every payment, whereas when buying, it is charged on the total amount of the sale.
Annual depreciation: Every year your vehicle will depreciate to a certain extent, meaning that it would lose it market value. The annual depreciation gauges the rate at which this happens. A depreciation rate of about 20% per year is considered high, whereas a depreciation rate of about 10% per year is considered low.
Residual percent: This represents the car’s value when the leasing term expires, expressed in percentages. Higher value generally means lower down payments.
Market value of vehicle: This represents the car’s value when the leasing term is over.
Investment rate of return: Instead of giving your money for down payment or security deposit, you could invest them. The investment rate of return represents the possible rate of return on your investments. It can vary depending on the type of investment you have chosen.
Lost interest on buy option: This represents the lost return you would have otherwise earned if you had chosen to invest the money for the buy option’s down payment and fees. If the leasing monthly payments are smaller the “Lost interest on buy option” would include the lost interest as a result of the difference. On the other hand, if leasing is more expensive, the lost interest on the difference will be subtracted from the interest costs for buying.
Lost interest on lease option: This represents the lost return you would have otherwise earned if you had chosen to invest the money for the lease option’s security deposit, down payment and fees.

The information on this site and the car loan calculators provided are intended only to assist you with your car loans decisions without providing any personal investment advice. Since we do not consider your personal financial situation, we cannot and do not guarantee that the information provided here will be applicable or accurate to you. We advise you to seek personalized professional advice regarding your personal situation.

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