1. What is Lease Vs Buy Auto Calculator?

The Lease Vs Buy Auto Calculator compares the total costs of leasing versus buying a vehicle. It helps consumers make informed financial decisions about their auto financing options.

2. How Does the Calculator Work?

The calculator uses these equations:

Where:

• \( MP \) — Monthly lease payment ($)
• \( T \) — Lease term (months)
• Purchase Price — Vehicle purchase price ($)
• Interest — Total interest paid over loan term ($)
• Resale — Estimated resale value at end of ownership ($)

Explanation: The calculator compares the total lease payments against the net cost of purchasing (including financing costs minus residual value).

3. Importance of Lease Vs Buy Comparison

Details: Understanding the true cost difference between leasing and buying helps consumers choose the most cost-effective option based on their driving habits, financial situation, and long-term plans.

4. Using the Calculator

Tips: Enter all required financial values in dollars. For accurate comparison, use the same vehicle model and similar time periods for both scenarios.

5. Frequently Asked Questions (FAQ)

Q1: Which is generally cheaper - leasing or buying?
A: Buying is typically cheaper in the long run if you keep the vehicle beyond the loan term, while leasing may be cheaper short-term but more expensive over multiple leases.

Q2: What factors should I consider beyond cost?
A: Consider mileage needs, desire for new vehicles, maintenance costs, and personal cash flow when deciding between lease and buy.

Q3: How accurate is the resale value estimate?
A: Resale values are estimates - check resources like Kelley Blue Book for current market values of similar vehicles.

Q4: Should I include maintenance costs?
A: For precise comparison, factor in that leases typically cover maintenance during the lease term while owned vehicles don't.

Q5: What about insurance differences?
A: Lease agreements often require higher insurance coverage than owned vehicles, which may affect total costs.