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Buy or Lease Auto? - Definitions

Should you lease or buy your car? Use this calculator to compare some of the costs! We calculate your monthly payments and your total net cost. By comparing these amounts, you can determine which may be the better value for you.

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TermDefinition
Term in months Term in months for your auto lease or your auto loan.
Down payment Amount paid as a down payment, which for leases is often called a capital reduction.
Other fees Any fee, other than a capital reduction or down payment, required to be paid at the close of the lease or loan. This may include license, title transfer fees, etc.
Price Total purchase price. Price should be after any manufacturer's rebate.
Interest rate Periodic charge, expressed as a percentage, for the use of borrowed money. Interest rates may vary and are subject to approval by the lender. Please enter the estimated current market rate.
APR (Not shown) The APR (annual percentage rate) is the yearly rate of interest and other fees, costs paid to acquire the loan. The APR calculations incorporate fees and interest into a single rate. Lenders are required by law to disclose the APR. The rate is used to compare various loans.
Sales tax rate Percentage sales tax to be charged on this purchase. Sales tax is included in each lease payment. Sales tax for buying is charged on the total sale amount.
Rate of depreciation The estimated rate of depreciation gauges how fast your new automobile will lose its market value. A high depreciation rate is about 20% per year, medium is 15% per year and low is 10% per year.
Residual percent For leases, this is the remaining value after the lease term expires. The higher this amount, the lower your lease payment will be.
Market value Value of your auto after the lease term is over.
Investment rate of return Estimated rate of return on investments. This is the return that you could make if you were to invest your down payment or security deposit instead of using it in your auto purchase or lease. Past investment performance is no guarantee for future performance.


These calculators are made available to you as self-help tools for your independent use. We do not guarantee their accuracy or applicability to your circumstances. These tools are not intended to provide investment, legal, tax, or accounting advice. All examples are hypothetical and for illustrative purposes only. You may wish to consult your financial institution or financial advisor for additional information and advice. The calculations in this Report are based on typical conventional fixed rate financing for the term of the loan selected. Actual results may vary depending on the specific product type and availability of loan terms. Additional fees may apply. All loans would be subject to lender approval and credit terms may vary. All user input is private and secure. We do not collect any of the personal information that you provide, nor do we save any of the Reports. All calculations are made on your own computer.