Buy vs. Lease

 
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DEFINITIONS

Term in months Term in months for your auto lease or your auto loan
Monthly payment Monthly lease payment
Other fees for lease Any fee, other than a capital reduction, required to be paid at the lease signing
Capital reduction Amount paid as a downpayment, which for leases is often called a capital reduction
Price Total purchase price for this auto. Price should be after any manufacturer's rebate
Interest rate Annual interest rate for your loan
Down payment Total downpayment for this loan
Other fees for purchase Any other fees that are required to be paid at the time of closing included title transfer fees
Sales tax rate Percentage sales tax to be charged on this purchase
Rate of depreciation The rate of deprecation 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
Market value at end of loan Value of your auto at the time your loan is paid in full
Lost interest on downpayment This is the amount of interest you could have earned if you had invested your downpayment instead of using it for your auto purchase
Net cost of purchase This is the total of all payments made, your down payment and the investment interest lost on your downpayment minus the market value of your auto at the end of the loan
Investment rate of return Rate of return on investments. This is the return that you would make if you were to invest your downpayment or security deposit instead of using it in your auto purchase or lease

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© 2003 Enterprise Bank, Member FDIC, Equal Housing Lender.