Lease vs Buy Calculator - Should I Lease or Buy a Car?
Lease vs Buy Calculator
Auto Lease Results
Auto Buy Results
Total Cost Visualization
Payment Amortization Table
| Month | Payment | Depreciation | Interest | Tax |
|---|
| Month | Payment | Principal | Interest | End Balance |
|---|
How Monthly Lease Payments are Calculated?
Example Calculation
Input Values:
- Auto Price: $50,000
- Lease Term: 36 months
- Interest Rate: 5%
- Down Payment: $10,000
- Trade Allowance: $2,000
- Sales Tax: 7%
- Residual Value: $24,000
Monthly Lease Payment: $554.32
Formula: Monthly Depreciation + Monthly Interest + Monthly Tax
Calculation: 388.89 + 129.17 + 36.26 = $554.32
1. Monthly Depreciation: $388.89
Formula: (Auto Price - Down Payment - Trade Allowance - Residual Value) ÷ Lease Term
Calculation: (50,000 - 10,000 - 2,000 - 24,000) ÷ 36 = $388.89
2. Money Factor: 0.00208333
Formula: Annual Interest Rate ÷ 24
Calculation: 5% ÷ 24 = 0.00208333
*When user selects Annual Interest Rate (%), we calculate Money Factor. When user selects Money Factor, we calculate Annual Interest Rate.
3. Monthly Interest: $129.17
Formula: (Auto Price - Down Payment - Trade Allowance + Residual Value) × Money Factor
Calculation: (50,000 - 10,000 - 2,000 + 24,000) × 0.00208333 = $129.17
4. Money Factor Equivalent APR: 5%
Formula: Money Factor × 24
*This equals the Annual Interest Rate and displays as Money Factor Equivalent APR
5. Monthly Tax: $36.26
Formula: (Monthly Depreciation + Monthly Interest) × Sales Tax (%)
Calculation: (388.89 + 129.17) × 7% = $36.26
Additional Cost Calculations
Down Payment: $10,000
As entered by user
Upfront Tax: $700
Formula: Down Payment × Sales Tax (%)
Calculation: $10,000 × 7% = $700
Amount Due at Signing: $10,700
Formula: Down Payment + Upfront Tax
Calculation: $10,000 + $700 = $10,700
Sales Tax to Own After Lease Ends: $1,680
Formula: Residual Value × Sales Tax (%)
Calculation: $24,000 × 7% = $1,680
Total Lease Payments: $19,955.52
Formula: (Monthly Depreciation + Monthly Interest + Monthly Tax) × Lease Term
Calculation: (388.89 + 129.17 + 36.26) × 36 = $19,955.52
Total Cost to Own After Lease Ends: $58,335.52
Formula: Down Payment + Total Lease Payments + Trade Allowance + Sales Tax to Own + Residual Value + Upfront Tax
Calculation: $10,000 + $19,955.52 + $2,000 + $1,680 + $24,000 + $700 = $58,335.52
What Is the Auto Lease Calculation Formulas?
Monthly Lease Payment Formula:
Monthly Payment = Monthly Depreciation + Monthly Interest + Monthly Tax
Where:
- Monthly Depreciation = (Auto Price - Down Payment - Trade Value - Residual Value) ÷ Term in Months
- Monthly Interest = (Auto Price - Down Payment - Trade Value + Residual Value) × Money Factor
- Monthly Tax = (Monthly Depreciation + Monthly Interest) × Sales Tax Rate
Money Factor Conversion:
APR = Money Factor × 24 × 100
Money Factor = APR ÷ 100 ÷ 24
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