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Should you buy or lease?

Perhaps you're already leaning towards leasing your car, perhaps towards buying. Either way, it pays to double-check your decision by viewing your projected lease and loan payments side-by-side and playing with the numbers until you find a scenario that works for you. Our auto lease vs loan calculator will let you do just that.

Compare loan and lease payments and make the best choice for you.

In no time at all, you can calculate your monthly loan payment, your lease payment, and your total net cost. By comparing the loan and lease payment amounts, you can determine which is the better value for you. This calculator is a combination auto lease calculator and auto loan calculator, enhanced by the fact that you can view your lease and loan payments side by side, and view an amortization schedule to boot.

Try this auto lease calculator today and you may well end up buying! Or vice-versa.

Buy Vs Lease Calculator Definitions

• Term in months - The number of month for your auto lease or your auto loan.
• Down payment - Amount paid as a down payment, which for leases is often called a "capital reduction."
• Other fees - Any fee, other than a capital reduction or down payment, required to be paid at the close of the lease or loan. This may include license, title transfer fees, etc.
• Purchase price - Total purchase price. Price should be after any manufacturer's rebate.
• Interest rate - Annual interest rate for your loan or your lease.
• Sales tax rate - Percentage sales tax to be charged on this purchase. Sales tax is included in each lease payment. Sales tax for buying is charged on the total sale amount.
• Rate of depreciation - The rate of depreciation gauges how fast your new automobile will lose its market value. A high depreciation rate is about 20% per year, medium is 15% per year and low is 10% per year.
• Residual percent - For leases, this is remaining value after the lease term expires. The higher this amount, the lower your lease payment will be.
• Market value of vehicle - Value of your auto after the lease term is over.
• Investment rate of return - Rate of return on investments. This is the return that you would make if you were to invest your down payment or security deposit instead of using it in your auto purchase or lease. The actual rate of return is largely dependant on the type of investments you select. From January 1970 to December 2003, the average compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 11.7% per year. During this period, the highest 12-month return was 64%, and the lowest was -39%. Savings accounts at a bank pay as little as 1% or less. It is important to remember that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment.
• Lost interest on buy option - This includes any interest you would have earned at your investment rate of return on the buy option's down payment and other fees. If the monthly payment for leasing is less than the monthly payment for buying, this also includes any lost interest due to the higher monthly payments. If leasing is more expensive than buying, your interest costs for buying are reduced by the amount of interest you would earn on the difference.
• Lost interest on lease option - This includes any interest you would have earned at your investment rate of return on the lease option's down payment, security deposit and other fees. Please see the definition for "Lost interest on buy option" for an explanation on how we account for any interest you might earn by having a lower monthly lease payment.

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