The Lease vs. Loan Calculator helps you understand the issues related to leasing or buying an automobile by comparing the costs associated with each option.

• Enter ballpark values by clicking on and dragging the diamond-shaped sliders left or right. Enter exact numbers by clicking on the number in the box on the right and type your number (no commas).
• The results of your calculations show in the box at the bottom of the calculator.

MSRP

This is the Manufacturer Suggested Retail Price, also known as the list price.

Purchase Price

This is the negotiated price of the automobile. This price is used in both the lease and the purchase options as the basic price you agreed to pay for the automobile.

Sales Tax

This is the sales tax rate in your area.

Savings Rate

This is the rate you would have earned if, instead of paying for the vehicle, you had left the money in a savings account.

Down Payment

This is really a 2-part amount. The first part is generally an amount required by the lender. The second part is the amount you are willing to pay (if any) at the beginning of the loan in order to reduce your monthly payments. The more money you pay as down payment, the less your monthly payment will be.

Loan Rate

The interest rate charged by the lender for the money you borrow in the purchase option. The lower the rate, the less interest you have to pay per month and throughout the life of the loan.

Loan Term

The duration (in months) for which you borrow the money.

Cash Down

This is really a 2-part amount. The first part is generally an amount required by the lessor. The second part is the amount you are willing to pay (if any) at the beginning of the lease in order to reduce your monthly payments. The more money you pay as down payment, the less your monthly payment will be.

Fees

The non-refundable fees you pay at the inception of the lease.

Security deposit

The refundable security deposit you pay at the inception of the lease.

Lease Rate

The rate charged by the lessor for allowing you to use their money to purchase the vehicle for them.

Lease Term

The duration of the lease. This is how long you can use the vehicle. At the end of this term, your choices most often are: a) buy the vehicle for the residual value set at the time of the lease or b) turn in the vehicle.

Graph

The graph compares the annual cost of ownership between a lease and a loan. Grab the black diamond at the bottom right of the x axis on the graph and slide it to a year value to see the differences in the cost of ownership for that year.

Results

The results box recaps the comparison of the costs of a loan vs. the costs of a lease and shows you which one is saves you the most money.