Lease vs. Buy Car Calculator

What Lease vs. Buy Car is for

Lease vs. Buy Car Calculator is the page to open when you need lease vs. buy car from measurements you already have. It belongs with the other automotive calculators because that is the work this arithmetic supports. The same note written as a standard loan is the amortizing payment. Type the entries first. The result stays hidden until you press Calculate, so a half-finished form never flashes a number you might mistake for the answer.

How to fill in this calculator

1. Vehicle Price. Enter the value this part of the job needs.
2. Residual Value. Enter the value this part of the job needs.
3. Trade-in Value. Enter the value this part of the job needs.
4. Down Payment. Enter the value this part of the job needs.
5. Dealer Reductions. Enter the value this part of the job needs.
6. Sales Tax. Enter the value this part of the job needs.
7. Dealer Fees. Enter the value this part of the job needs.
8. Lease Term. Enter the value this part of the job needs. The unit list on this field includes mo, yr.
9. Money Factor. Enter the value this part of the job needs.
10. Loan Term. Enter the value this part of the job needs. The unit list on this field includes mo, yr.
11. Interest Rate. Enter the value this part of the job needs.

The formula in plain language

The amount financed is the price plus any warranty, minus the trade, with sales tax applied to that taxable balance, then minus the down payment. The monthly payment uses the standard loan formula: each payment covers that month's interest and a slice of principal. A lease payment is depreciation plus a rent charge. The rent charge is the money factor times the sum of the cap cost and the residual. Money factor is the interest rate divided by 2,400.

A worked example

A $28,000 vehicle with $1,500 down, no trade, 6% tax, and 6% interest for 60 months finances about $28,180 and pays about $545 a month.

A vehicle payment is price, tax, term, and rate. This lease vs. buy car figure belongs beside auto loan payment and motorcycle loan.

Mistakes that move the answer

• Tax rules differ by state. Some tax the price before the trade-in is subtracted.
• A lease payment is not buying the same equity as a loan payment of the same size.

How to check the result

After Calculate shows the lease vs. buy car result, redo the last operation with a pencil using the rounded figures on the screen. Matching that check means the inputs were read correctly. If you edit a label or a sentence in this HTML file, reload the page. The form and this article both live in the file, so the edit is what visitors will read.