Lease vs Buy Car Calculator: Calculating the Best Way to Buy a Car

Are you wondering whether you should lease or buy your next vehicle? If so, you've come to the right site. Our buy vs lease calculator shows you how much you'll pay when you take out a lease or a loan for your next Chrysler®, Jeep®, or Dodge®.

Lease vs Buy Car Calculator

The lease vs buy calculator allows you to plug in various metrics and determine which method of purchase is most suitable for your situation. You can enter the purchase price of the vehicle, the leasing period, the interest rate, and the lease or loan term. That way, you can easily figure out whether leasing or buying your vehicle is the best financial decision.

Buy Car Calculator: Lease or Buy in Missouri?

Both leasing and buying a vehicle have unique advantages, and it's hard to tell which method is best for Missouri car owners. While leasing is the more flexible option, buying can offer you a certain level of security. It is often the better choice if you're planning on keeping your car for more than a few years, you have a bad credit score, or vehicle ownership is important to you.

Your Personal Financial Profile

The first thing we need to consider when calculating whether to lease or buy your car is your personal financial situation. The decision to lease vs buy a car depends on your ability to provide your lender with a significant down payment and your credit history. These factors influence your interest rate and the deals available to you.

Your Future Plans

Are you settled in your local area, or are you looking to move to a different state soon? Is your family's situation changing soon? If so, a leased vehicle could be best because it allows you to remain more flexible.

Benefits of Car Leasing

Leasing refers to an agreement or contract between two parties, typically an individual (lessee) and a leasing company or dealership (lessor), in which the lessee obtains the right to use the vehicle for a specified period of time in exchange for an acquisition fee and regular payments. When you lease a car, you are essentially renting it from the dealership.

This arrangement comes with several unique advantages. You can benefit from low monthly lease payments, immediate access to your dream car, reduced maintenance costs, and even potential tax benefits. Additionally, you have several options when the lease expires. You can either return the car, pay off the outstanding loan balance and purchase the vehicle outright, or trade it in for a new model of the same car.

Low Monthly Payments

Leasing is often the better option because you benefit from lower monthly payments. When you lease a vehicle, you are paying for the depreciation of the car during the lease term. Since you don't own the car outright, you are not responsible for its full value. This lowers your monthly payments as they are based on the estimated depreciation of the car over the lease period.

Leasing companies estimate the residual value of the vehicle at the end of the lease term. This value is subtracted from the initial capitalized cost (the vehicle's price) to determine the amount you will be financing. A higher residual value can lower your monthly payments, as you are paying for the difference between the initial cost and the residual value.

Immediate Access to New Car Models

Because you're spreading out the cost of your car, you can buy your dream Chrysler, Jeep, or Dodge right away. This means that you don't have to settle for a subpar vehicle or save up for many months or even years to buy your next car.

Reduced Maintenance Costs

Maintenance is often included in your monthly lease payment. That way, you don't have to pay extra when your car breaks down or you need new parts. Reduced maintenance costs are particularly important for people who are trying to budget or those who can't afford unexpected expenses.

Flexibility and Variety

Flexibility is one of the main reasons why so many people lease their cars. With an auto lease, you don't have to commit to a vehicle for the long term. Instead, you can keep your options open for several years and decide what to do with the vehicle when the lease term expires.

After your lease expires, you can either buy your car outright or pay a small disposition fee and give back the vehicle. It will then be put on the market as a second-hand car.

A Down Payment Is Not Always Necessary

A capitalized cost reduction, also called a down payment, is an amount of money you pay upfront to reduce the cost of your monthly payments. When you buy a car, you typically pay 10%-20% right away, and the rest of the money is loaned to you.

When leasing a car, you don't always have to provide a capital reduction. Some agreements allow you to lease your new car without paying a down payment. This makes it easier for you to afford your new car, especially if you don't have significant savings. It's also advantageous for people who want to invest their money because they don't lose the investment rate of return on the lease option's down payment.

Potential Tax Benefits

When you buy a vehicle, you have to pay various types of taxes and fees. In Missouri, they include sales tax, title fees, title transfer fees, registration fees, and various other fees. The state sales tax rate is currently at 4.225 percent, but it might be higher in your area due to added local sales tax.

While you still have to pay sales tax even if you lease your vehicle, you only pay it on the amount of each monthly payment. This means that you can not only spread out the cost of your car but also the cost of sales tax.

Benefits of a Loan

Although many people benefit from a lease, it isn't the only good option. An auto loan can be advantageous for those who value financial stability and want to own their vehicles. It is also a great idea for buyers who are looking to keep their new car in the long term because the loan can be paid off within a few years.

You Own the Vehicle

Although you sometimes have to come up with higher monthly payments for a loan than for a lease, you own the vehicle in question. Because it's legally yours, you can drive an unlimited number of miles and make adjustments to the vehicle as you see fit. This is particularly advantageous for people who would like to keep their cars for a long time or those who drive frequently.

Your Loan Can Be Paid Off

Most auto loans last for several years, so the cost of the vehicle is spread out. Once the loan term ends, you've paid off your vehicle in full, which means that you now own it outright. This can provide peace of mind and help you to lower your overall costs since you won't have to pay your monthly car loan anymore until you buy a new car.

Sometimes, the remaining loan term can be shortened if you have enough money to pay more than the amount you initially agreed upon. In this case, it's best to speak to your dealership or the financial institution that issued the auto loan.

You Can Use the Trade-In Option at the Dealership

If your currently owned vehicle still has some value, you can trade it in for a new one. This lowers the total cost of your car loan and makes it easier for you to buy the car you desire. As long as you've taken good care of your vehicle, it's likely that the trade-in value is significant.

Benefits of Buying a Car Outright

When you buy a car outright, you provide the dealership with the entire purchase price outright. This means that you don't have a car lease or loan. Although this option is the cheapest, it isn't affordable for most people because the average new vehicle currently costs between $45,000 and $50,000 in the US.

No Monthly Lease Payment

If you buy your car without financing, you don't have to worry about a monthly payment. This reduces the amount you spend each month and potentially frees up money for other purchases.

Cheapest Overall Option

When you take out an auto loan or lease, you have to pay interest every month. At the moment, the average interest rate is high, so you might pay significantly more for a leased car than for one you buy upfront. When buying your vehicle upfront, you don't have to worry about this. There is no lost interest, so you can save money and benefit from a low total net cost.

However, buying your vehicle outright isn't always the best choice, even if you have the necessary funds. This is because you could invest your money and achieve a greater rate of return, especially if you have a good credit score and can therefore get a low-interest rate for your loan or lease.

What Are the Upfront Costs when Leasing or Buying a Vehicle?

Before you can drive away in your new car, you have to pay a down payment, which is usually a percentage of the car's current market value. Most people who take out an auto loan put down 10-20%, but you might be able to put down less if you have a high credit score.

As mentioned, you don't always have to provide a security deposit if you are leasing a car. However, your net cost will be lower if you do. Usually, you also have to pay an administration fee. This covers the dealership's costs associated with the sale of the vehicle.

What Is the Average Monthly Payment?

Your monthly payment will depend on several factors, including your down payment, the purchase price of the vehicle, the loan or lease term, and the interest rate or money factor. On average, Americans pay between $500 and $600 for a car lease and between $600 and $700 for an auto purchase.

How Can I Get Started?

The best way to start your car-buying or leasing journey is to use our "Lease vs Buy Car Calculator." It estimates your monthly payment, depending on variables such as your sales tax rate, down payment, lease or loan term, and interest rate or money factor. That way, you can figure out what the net cost of your car is and whether you should buy or lease a car.

Once you've played around with our financial calculators, you can reach out to us and ask us about the vehicles we're currently selling. We'll help you find the best deal, so you can be sure you're not overpaying.

Why Choose the Dealership?

At the dealership, you can get excellent deals, no matter if you choose to lease or buy your new vehicle. We are here for you throughout your car-buying journey. Once you've purchased your Chrysler, Jeep, or Dodge, you can come to our service center and body shop for your maintenance needs. We offer oil changes, replacement tires, safety checks, and a wide range of other services. And when you're ready to trade in your vehicle, we'll be happy to buy it from you and offer you a discount on your new lease or loan.

If you're ready to purchase your next vehicle, use our convenient online calculator to find out more about the expected cost of your loan or lease. Then, give us a call at Landmark Dodge Chrysler Jeep Ram at 816-836-0100 and book your test drive. We look forward to helping you find the perfect financing deal for your family.

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