Buying vs. Leasing a Vehicle
Purpose: To compare costs of buying or leasing an automobile or other vehicle. This analysis should compare two situations with comparable payment amounts, even though the length of the agreements may differ.
Financial Planning Activities: Obtain costs related to leasing and buying a vehicle. This sheet is also available in an Excel spreadsheet format in Connect Finance.
Purchase Costs
Total vehicle cost, including sales tax ($ ____________) Down payment (or full amount if paying cash)
Monthly loan payment: $ ____________ times ______ month loan (this item is zero if vehicle is not financed)
Opportunity cost of down payment (or total cost of the vehicle if bought for cash):
$ ____________ times number of years of financing/ownership times ______ percent (interest rate which funds could earn)
$ _____________________
$ _____________________
$ _____________________
$ _____________________
$ _____________________
$ _____________________
$ _____________________
$ _____________________
Less: estimated value of vehicle at end of loan term/ownership
Total cost to buy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Leasing Costs
Security deposit
Monthly lease payments: $ ____________ times ______ months
Opportunity cost of security deposit: $ ____________ times years times ______ percent
End-of-lease charges (if applicable)*
Total cost to lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .