Lease vs Buy Car worksheet

1. Savings from buying over 5 years: $4,192.17

1. Work out how much you borrow: the price plus sales tax, minus your down payment

   $\mathrm{\$40,000.00}\times \left(1+\mathrm{8\%}\right)-\mathrm{\$3,100.00}$$=\mathrm{\$40,100.00}$

2. Find the loan payment. A standard formula gives the one monthly amount that pays off the loan in 48 months, using the monthly rate (the APR ÷ 12)

   $\frac{\mathrm{\$40,100.00}\times 0.00458333}{1-{\left(1+0.00458333\right)}^{\mathrm{-48}}}$$=\mathrm{\$932.58}$

3. Find what the car is worth after 5 years, losing 11% of its value each year

   $\mathrm{\$40,000.00}\times {\left(1-\mathrm{11\%}\right)}^5$$=\mathrm{\$22,336.24}$

4. Cost of buying: add the down payment, 48 loan payments and anything still owed, then take off what the car sells for

   $\mathrm{\$3,100.00}+\mathrm{\$44,764.06}+\mathrm{\$0.00}-\mathrm{\$22,336.24}$$=\mathrm{\$25,527.83}$

5. Cost of leasing: each of the 2 leases adds its signing cost and return fee, plus 60 monthly payments

   $2\times \left(\mathrm{\$2,500.00}+\mathrm{\$360.00}\right)+\mathrm{\$400.00}\times 60$$=\mathrm{\$29,720.00}$

6. Subtract the cost of buying from the cost of leasing. A negative answer means leasing is cheaper

   $\mathrm{\$29,720.00}-\mathrm{\$25,527.83}$$=\mathrm{\$4,192.17}$

2. Savings from buying over 5 years: $23,073.49

1. Work out how much you borrow: the price plus sales tax, minus your down payment

   $\mathrm{\$22,500.00}\times \left(1+\mathrm{9\%}\right)-\mathrm{\$3,750.00}$$=\mathrm{\$20,775.00}$

2. Find the loan payment. A standard formula gives the one monthly amount that pays off the loan in 72 months, using the monthly rate (the APR ÷ 12)

   $\frac{\mathrm{\$20,775.00}\times 0.0075}{1-{\left(1+0.0075\right)}^{\mathrm{-72}}}$$=\mathrm{\$374.48}$

3. Find what the car is worth after 5 years, losing 13% of its value each year

   $\mathrm{\$22,500.00}\times {\left(1-\mathrm{13\%}\right)}^5$$=\mathrm{\$11,214.47}$

4. Cost of buying: add the down payment, 60 loan payments and anything still owed, then take off what the car sells for

   $\mathrm{\$3,750.00}+\mathrm{\$22,468.83}+\mathrm{\$4,282.15}-\mathrm{\$11,214.47}$$=\mathrm{\$19,286.51}$

5. Cost of leasing: each of the 2 leases adds its signing cost and return fee, plus 60 monthly payments

   $2\times \left(\mathrm{\$2,800.00}+\mathrm{\$380.00}\right)+\mathrm{\$600.00}\times 60$$=\mathrm{\$42,360.00}$

6. Subtract the cost of buying from the cost of leasing. A negative answer means leasing is cheaper

   $\mathrm{\$42,360.00}-\mathrm{\$19,286.51}$$=\mathrm{\$23,073.49}$

3. Savings from buying over 6 years: $33,765.42

1. Work out how much you borrow: the price plus sales tax, minus your down payment

   $\mathrm{\$25,000.00}\times \left(1+\mathrm{6\%}\right)-\mathrm{\$2,800.00}$$=\mathrm{\$23,700.00}$

2. Find the loan payment. A standard formula gives the one monthly amount that pays off the loan in 60 months, using the monthly rate (the APR ÷ 12)

   $\frac{\mathrm{\$23,700.00}\times 0.00566667}{1-{\left(1+0.00566667\right)}^{\mathrm{-60}}}$$=\mathrm{\$467.06}$

3. Find what the car is worth after 6 years, losing 15% of its value each year

   $\mathrm{\$25,000.00}\times {\left(1-\mathrm{15\%}\right)}^6$$=\mathrm{\$9,428.74}$

4. Cost of buying: add the down payment, 60 loan payments and anything still owed, then take off what the car sells for

   $\mathrm{\$2,800.00}+\mathrm{\$28,023.32}+\mathrm{\$0.00}-\mathrm{\$9,428.74}$$=\mathrm{\$21,394.58}$

5. Cost of leasing: each of the 2 leases adds its signing cost and return fee, plus 72 monthly payments

   $2\times \left(\mathrm{\$2,200.00}+\mathrm{\$540.00}\right)+\mathrm{\$690.00}\times 72$$=\mathrm{\$55,160.00}$

6. Subtract the cost of buying from the cost of leasing. A negative answer means leasing is cheaper

   $\mathrm{\$55,160.00}-\mathrm{\$21,394.58}$$=\mathrm{\$33,765.42}$

4. Savings from buying over 4 years: $1,567.87

1. Work out how much you borrow: the price plus sales tax, minus your down payment

   $\mathrm{\$35,000.00}\times \left(1+\mathrm{9\%}\right)-\mathrm{\$3,200.00}$$=\mathrm{\$34,950.00}$

2. Find the loan payment. A standard formula gives the one monthly amount that pays off the loan in 36 months, using the monthly rate (the APR ÷ 12)

   $\frac{\mathrm{\$34,950.00}\times 0.00666667}{1-{\left(1+0.00666667\right)}^{\mathrm{-36}}}$$=\mathrm{\$1,095.21}$

3. Find what the car is worth after 4 years, losing 14% of its value each year

   $\mathrm{\$35,000.00}\times {\left(1-\mathrm{14\%}\right)}^4$$=\mathrm{\$19,145.29}$

4. Cost of buying: add the down payment, 36 loan payments and anything still owed, then take off what the car sells for

   $\mathrm{\$3,200.00}+\mathrm{\$39,427.42}+\mathrm{\$0.00}-\mathrm{\$19,145.29}$$=\mathrm{\$23,482.13}$

5. Cost of leasing: each of the 2 leases adds its signing cost and return fee, plus 48 monthly payments

   $2\times \left(\mathrm{\$2,600.00}+\mathrm{\$325.00}\right)+\mathrm{\$400.00}\times 48$$=\mathrm{\$25,050.00}$

6. Subtract the cost of buying from the cost of leasing. A negative answer means leasing is cheaper

   $\mathrm{\$25,050.00}-\mathrm{\$23,482.13}$$=\mathrm{\$1,567.87}$

5. Savings from buying over 5 years: $3,029.65

1. Work out how much you borrow: the price plus sales tax, minus your down payment

   $\mathrm{\$32,500.00}\times \left(1+\mathrm{7\%}\right)-\mathrm{\$3,000.00}$$=\mathrm{\$31,775.00}$

2. Find the loan payment. A standard formula gives the one monthly amount that pays off the loan in 48 months, using the monthly rate (the APR ÷ 12)

   $\frac{\mathrm{\$31,775.00}\times 0.00458333}{1-{\left(1+0.00458333\right)}^{\mathrm{-48}}}$$=\mathrm{\$738.97}$

3. Find what the car is worth after 5 years, losing 15% of its value each year

   $\mathrm{\$32,500.00}\times {\left(1-\mathrm{15\%}\right)}^5$$=\mathrm{\$14,420.42}$

4. Cost of buying: add the down payment, 48 loan payments and anything still owed, then take off what the car sells for

   $\mathrm{\$3,000.00}+\mathrm{\$35,470.78}+\mathrm{\$0.00}-\mathrm{\$14,420.42}$$=\mathrm{\$24,050.35}$

5. Cost of leasing: each of the 2 leases adds its signing cost and return fee, plus 60 monthly payments

   $2\times \left(\mathrm{\$2,400.00}+\mathrm{\$340.00}\right)+\mathrm{\$360.00}\times 60$$=\mathrm{\$27,080.00}$

6. Subtract the cost of buying from the cost of leasing. A negative answer means leasing is cheaper

   $\mathrm{\$27,080.00}-\mathrm{\$24,050.35}$$=\mathrm{\$3,029.65}$

6. Savings from buying over 5 years: -$3,648.07

1. Work out how much you borrow: the price plus sales tax, minus your down payment

   $\mathrm{\$44,000.00}\times \left(1+\mathrm{6\%}\right)-\mathrm{\$3,700.00}$$=\mathrm{\$42,940.00}$

2. Find the loan payment. A standard formula gives the one monthly amount that pays off the loan in 72 months, using the monthly rate (the APR ÷ 12)

   $\frac{\mathrm{\$42,940.00}\times 0.00458333}{1-{\left(1+0.00458333\right)}^{\mathrm{-72}}}$$=\mathrm{\$701.55}$

3. Find what the car is worth after 5 years, losing 20% of its value each year

   $\mathrm{\$44,000.00}\times {\left(1-\mathrm{20\%}\right)}^5$$=\mathrm{\$14,417.92}$

4. Cost of buying: add the down payment, 60 loan payments and anything still owed, then take off what the car sells for

   $\mathrm{\$3,700.00}+\mathrm{\$42,092.93}+\mathrm{\$8,173.06}-\mathrm{\$14,417.92}$$=\mathrm{\$39,548.07}$

5. Cost of leasing: each of the 2 leases adds its signing cost and return fee, plus 60 monthly payments

   $2\times \left(\mathrm{\$2,500.00}+\mathrm{\$450.00}\right)+\mathrm{\$500.00}\times 60$$=\mathrm{\$35,900.00}$

6. Subtract the cost of buying from the cost of leasing. A negative answer means leasing is cheaper

   $\mathrm{\$35,900.00}-\mathrm{\$39,548.07}$$=\mathrm{-\$3,648.07}$

7. Savings from buying over 6 years: $3,506.72

1. Work out how much you borrow: the price plus sales tax, minus your down payment

   $\mathrm{\$40,000.00}\times \left(1+\mathrm{6\%}\right)-\mathrm{\$5,000.00}$$=\mathrm{\$37,400.00}$

2. Find the loan payment. A standard formula gives the one monthly amount that pays off the loan in 48 months, using the monthly rate (the APR ÷ 12)

   $\frac{\mathrm{\$37,400.00}\times 0.00625}{1-{\left(1+0.00625\right)}^{\mathrm{-48}}}$$=\mathrm{\$904.29}$

3. Find what the car is worth after 6 years, losing 14% of its value each year

   $\mathrm{\$40,000.00}\times {\left(1-\mathrm{14\%}\right)}^6$$=\mathrm{\$16,182.69}$

4. Cost of buying: add the down payment, 48 loan payments and anything still owed, then take off what the car sells for

   $\mathrm{\$5,000.00}+\mathrm{\$43,405.96}+\mathrm{\$0.00}-\mathrm{\$16,182.69}$$=\mathrm{\$32,223.28}$

5. Cost of leasing: each of the 2 leases adds its signing cost and return fee, plus 72 monthly payments

   $2\times \left(\mathrm{\$2,400.00}+\mathrm{\$345.00}\right)+\mathrm{\$420.00}\times 72$$=\mathrm{\$35,730.00}$

6. Subtract the cost of buying from the cost of leasing. A negative answer means leasing is cheaper

   $\mathrm{\$35,730.00}-\mathrm{\$32,223.28}$$=\mathrm{\$3,506.72}$

8. Savings from buying over 7 years: $10,348.41

1. Work out how much you borrow: the price plus sales tax, minus your down payment

   $\mathrm{\$42,500.00}\times \left(1+\mathrm{8\%}\right)-\mathrm{\$4,600.00}$$=\mathrm{\$41,300.00}$

2. Find the loan payment. A standard formula gives the one monthly amount that pays off the loan in 60 months, using the monthly rate (the APR ÷ 12)

   $\frac{\mathrm{\$41,300.00}\times 0.00541667}{1-{\left(1+0.00541667\right)}^{\mathrm{-60}}}$$=\mathrm{\$808.08}$

3. Find what the car is worth after 7 years, losing 13% of its value each year

   $\mathrm{\$42,500.00}\times {\left(1-\mathrm{13\%}\right)}^7$$=\mathrm{\$16,033.33}$

4. Cost of buying: add the down payment, 60 loan payments and anything still owed, then take off what the car sells for

   $\mathrm{\$4,600.00}+\mathrm{\$48,484.92}+\mathrm{\$0.00}-\mathrm{\$16,033.33}$$=\mathrm{\$37,051.59}$

5. Cost of leasing: each of the 3 leases adds its signing cost and return fee, plus 84 monthly payments

   $3\times \left(\mathrm{\$2,800.00}+\mathrm{\$400.00}\right)+\mathrm{\$450.00}\times 84$$=\mathrm{\$47,400.00}$

6. Subtract the cost of buying from the cost of leasing. A negative answer means leasing is cheaper

   $\mathrm{\$47,400.00}-\mathrm{\$37,051.59}$$=\mathrm{\$10,348.41}$

9. Savings from buying over 6 years: $15,603.24

1. Work out how much you borrow: the price plus sales tax, minus your down payment

   $\mathrm{\$32,000.00}\times \left(1+\mathrm{9\%}\right)-\mathrm{\$4,000.00}$$=\mathrm{\$30,880.00}$

2. Find the loan payment. A standard formula gives the one monthly amount that pays off the loan in 36 months, using the monthly rate (the APR ÷ 12)

   $\frac{\mathrm{\$30,880.00}\times 0.00625}{1-{\left(1+0.00625\right)}^{\mathrm{-36}}}$$=\mathrm{\$960.56}$

3. Find what the car is worth after 6 years, losing 11% of its value each year

   $\mathrm{\$32,000.00}\times {\left(1-\mathrm{11\%}\right)}^6$$=\mathrm{\$15,903.40}$

4. Cost of buying: add the down payment, 36 loan payments and anything still owed, then take off what the car sells for

   $\mathrm{\$4,000.00}+\mathrm{\$34,580.16}+\mathrm{\$0.00}-\mathrm{\$15,903.40}$$=\mathrm{\$22,676.76}$

5. Cost of leasing: each of the 2 leases adds its signing cost and return fee, plus 72 monthly payments

   $2\times \left(\mathrm{\$2,600.00}+\mathrm{\$340.00}\right)+\mathrm{\$450.00}\times 72$$=\mathrm{\$38,280.00}$

6. Subtract the cost of buying from the cost of leasing. A negative answer means leasing is cheaper

   $\mathrm{\$38,280.00}-\mathrm{\$22,676.76}$$=\mathrm{\$15,603.24}$

10. Savings from buying over 5 years: $14,945.94

1. Work out how much you borrow: the price plus sales tax, minus your down payment

   $\mathrm{\$31,000.00}\times \left(1+\mathrm{6\%}\right)-\mathrm{\$3,400.00}$$=\mathrm{\$29,460.00}$

2. Find the loan payment. A standard formula gives the one monthly amount that pays off the loan in 36 months, using the monthly rate (the APR ÷ 12)

   $\frac{\mathrm{\$29,460.00}\times 0.00541667}{1-{\left(1+0.00541667\right)}^{\mathrm{-36}}}$$=\mathrm{\$902.92}$

3. Find what the car is worth after 5 years, losing 13% of its value each year

   $\mathrm{\$31,000.00}\times {\left(1-\mathrm{13\%}\right)}^5$$=\mathrm{\$15,451.05}$

4. Cost of buying: add the down payment, 36 loan payments and anything still owed, then take off what the car sells for

   $\mathrm{\$3,400.00}+\mathrm{\$32,505.11}+\mathrm{\$0.00}-\mathrm{\$15,451.05}$$=\mathrm{\$20,454.06}$

5. Cost of leasing: each of the 3 leases adds its signing cost and return fee, plus 60 monthly payments

   $3\times \left(\mathrm{\$2,250.00}+\mathrm{\$550.00}\right)+\mathrm{\$450.00}\times 60$$=\mathrm{\$35,400.00}$

6. Subtract the cost of buying from the cost of leasing. A negative answer means leasing is cheaper

   $\mathrm{\$35,400.00}-\mathrm{\$20,454.06}$$=\mathrm{\$14,945.94}$