Lease Vs. Buy A Car
Before comparing potential loan rates you must first decide whether to lease or buy your next vehicle. Use this calculator to find out which is best for you and calculate potential savings. Simply enter information on the purchase price and vehicle down payment to calculate the expected monthly payments and total net price.
Calculate your potential savings
A big decision is whether to buy or lease a car. This tool will calculate the monthly payments and the total net cost. By comparing these amounts and researching other differences between the two, you can determine which option is better for you.
How to calculate potential savings
To effectively calculate if buying or leasing your next vehicle is right for you start by entering the vehicle information. This is the purchase price, vehicle down payment along with expected sales tax rate. After the calculator has gathered those starting numbers compare the net price for buying or leasing the vehicle. Then enter the expected term and interest rates for both.
The net price of buying is calculated by adding the upfront costs — down payment, all fees and taxes — lost interest and the market value of the vehicle. Compare this number with the net price of the lease which is the combination of the upfront costs, lease payments and lost interest for the lease.
Take a look at these two numbers visualized on the graph to determine which option is less expensive.
Buying and leasing definitions
Is it better to lease or buy a car?
The choice to lease or buy your next car comes down to the miles you intend to drive and the amount that you are willing to spend. There is no golden rule when it comes to deciding which is best but rather takes some reflection on your driving habits and budget.
Leasing a car tends to cost less on a monthly basis and offers you the chance to get behind the wheel of a nicer vehicle. But it does mean mileage restrictions and not holding full control over the vehicle. Buying puts you in total control of the vehicle, so you won’t have to worry about keeping track of the number on the odometer or additional charges for vehicle wear-and-tear.