Should I Lease or Buy a Car? (Calculator)

Published on Apr 14, 2015 04:52 pm

To buy or to lease, that’s the question facing many people shopping on the auto market. While buying represents the conventional line of thought, leasing has become more attractive in recent years. Although the payments may seem enticing, leasing may not always be the best decision. In fact, sometimes it is actually better to buy than to borrow. So, how do you decide which path is right for you? Our Lease or Purchase Auto Calculator can help you better understand your finances so you can make the best choice for your new wheels.

Lease vs. Buy Auto Calculator Definitions

  • Security deposit and leasing fees — Some leases may require an upfront payment known as a security deposit. This amount generally equals one month’s payment on the lease. Leasing fees may include an acquisition fee (an administration fee the leasing company often charges), disposition fee (due at the end of the lease to cover costs of destroying or selling the vehicle) and tag, title and license fees (required by the government, which dealers collect and send on).
  • Upfront costs — This term applies to additional expenses that may be part of leasing a car, such as the initial down payment, sales tax, etc.
  • Annual percentage rate (APR) on the loan — This is a standard calculation that borrowers can use to compare one loan to another. The percentage rate will combine the interest rate, associated fees and terms into one, easily understandable rate.

Get Your Free Experian Credit Report No Credit Card Required

This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.
Published by permission from, Inc., an Experian company. © 2015, Inc. All rights reserved.

More like this