1. What is Lease vs Buy Comparison?

The lease vs buy comparison helps you determine which option is more financially advantageous when acquiring a vehicle. It compares the total costs of leasing versus buying over the same time period.

2. How Does the Calculator Work?

The calculator uses these formulas:

Where:

• Monthly Lease — Your monthly lease payment
• Months — Duration of lease/ownership period
• Monthly Loan — Your car loan payment if buying
• Ownership Costs — Additional costs like insurance, maintenance, etc.

3. Importance of Cost Comparison

Details: Comparing total costs helps make informed financial decisions about vehicle acquisition. Leasing often has lower monthly payments but no equity, while buying builds equity but has higher ownership costs.

4. Using the Calculator

Tips: Enter all monthly payments in dollars, the time period in months, and include all anticipated ownership costs for accurate comparison. Consider both short-term and long-term costs.

5. Frequently Asked Questions (FAQ)

Q1: Should I always choose the cheaper option?
A: Not necessarily. Consider factors like how long you'll keep the car, mileage needs, and whether you want to own the vehicle eventually.

Q2: What ownership costs should I include?
A: Include insurance, maintenance, repairs, tires, and any other costs you wouldn't pay while leasing.

Q3: Does this account for the car's residual value?
A: No, this is a simplified comparison. For more accuracy, subtract estimated resale value from the buy cost.

Q4: How long should I compare?
A: Compare over the lease term (typically 24-36 months) or your planned ownership period.

Q5: Are there non-financial factors to consider?
A: Yes - consider your driving habits, desire for new cars frequently, customization needs, and mileage requirements.