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# Credit Center: Calculate

## Calculator Definitions

The total amount of money you still owe on the current financing for a trade-in vehicle if you're still making payments. To get your exact payoff amount, contact your lender.

When you purchase a vehicle with a loan, this represents the money you pay at the beginning of the financial agreement to lower the total amount you finance.

When you purchase a vehicle with a loan, this is the percentage dollar amount that determines the yearly cost of credit. For instance, if you took out an \$8,500 loan with an interest rate of 7.9% and a 36-month term, at the end of the loan your total payments would equal \$9,575.03. The difference between the initial amount of your loan and what you paid, which in this example is \$1,075.03, is the cost of using credit which was established by the interest rate.

How long you make payments to a loan, most commonly expressed in months. Also referred to as a "term." A loan with a term of 36 months, for instance, indicates that you will make 36 monthly payments during the life of the loan.

The approximate amount of money you will be required to pay each month on a loan.

Incentives, usually cash based, that a manufacturer gives you toward the purchase of a vehicle. Rebates are typically applied as a down payment that reduces the vehicle price.

The dollar amount the leasing company predicts a vehicle will be worth at the end of the lease. This future value is determined by estimating how much the vehicle will depreciate during the time you drive it. A vehicle with a high residual value is expected to maintain a considerable amount of its original value and may have a lower monthly payment than a vehicle that is expected to depreciate significantly. Read Leasing Basics to learn more.

The percent of state sales taxes that will be applied to the vehicle price. Remember, this could be based on the state and locality where you register the vehicle, not necessarily where you purchase it.

The amount of money your current vehicle is worth toward the purchase of another vehicle. Keep in mind that dealerships will take the difference between the Trade-In Value and the Amount Owed on Trade-In to determine how much money should be applied to the sale.

The dollar amount you pay for the vehicle before sales tax and additional factors, such as rebates, are applied.

# Purchase vs. Lease Calculator

Fill out the information below to see how much you could save by purchasing or leasing your next vehicle.

* = Required

Please reduce the sum of your Down Payment, Rebates, Trade-In Value or Residual Value to estimate the savings between a purchase and a lease.

Please fill out all of the required fields to estimate the savings between a purchase and a lease.

Please enter a number greater than 0 in "Length of Loan."

Please enter a number greater than 0 in "Length of Lease."

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This tool is an anonymous educational resource that gives you a general look at financial calculations. Additional costs associated with leasing such as mileage charges, acquisition fees and excess wear-and-tear expenses are not factored in this tool. This calculation assumes that sales tax is applied to the entire vehicle price on a purchase. Sales tax may vary by state and locality. We recommend you work with dealership representatives and members of the financial institutions you trust to help determine your exact options.