Purchasing your leased vehicle at the end of your lease term can be a great way to own a car you're already familiar with.
If you don't have the full amount available upfront, you'll likely need a lease buyout loan. This calculator helps you
estimate the monthly payments for such a loan, making it easier to budget for your potential new-to-you vehicle.
How the Lease Buyout Loan Calculator Works
The calculator uses a standard auto loan payment formula to determine your estimated monthly payment.
Here's a breakdown of the inputs and the underlying math:
Lease Buyout Price: This is the price the leasing company is charging you to purchase the vehicle at the end of your lease. It's the starting principal for your loan.
Loan Term (Months): This is the duration over which you will repay the loan. A longer term generally means lower monthly payments but higher total interest paid.
Annual Interest Rate (%): This is the yearly interest rate charged by the lender. The calculator converts this to a monthly rate for the calculation.
Down Payment (Optional): Any amount you pay upfront reduces the principal loan amount, thereby lowering your monthly payments and the total interest paid.
Loan Fees: These are one-time fees associated with securing the loan (e.g., application fees, origination fees, documentation fees). These are added to the loan principal.
The Formula
The core calculation for the monthly payment (M) of an amortizing loan is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly payment
P = The principal loan amount. This is calculated as: (Buyout Price - Down Payment) + Loan Fees
i = Your monthly interest rate. This is calculated as: (Annual Interest Rate / 100) / 12
n = Total number of payments (the loan term in months)
If the annual interest rate is 0%, the monthly payment is simply calculated as P / n.
Key Considerations for Lease Buyouts:
Vehicle Condition: Ensure you have the vehicle inspected by an independent mechanic before committing to the buyout, especially if it's out of warranty.
Lease Contract: Review your lease agreement for any specific clauses, fees, or procedures related to buyout.
Market Value: Compare the buyout price to the current market value of the vehicle. Is it a good deal?
Loan Options: Explore financing options from banks, credit unions, or specialized auto lenders. Your current dealership might offer financing, but it's wise to compare rates.
Total Cost: Remember to factor in the loan interest, fees, and potential future maintenance costs when assessing the total cost of ownership.
Use this calculator as a starting point to understand the potential financial commitment. Always consult with lenders for precise loan terms and conditions.
function calculateLeaseBuyoutLoan() {
var buyoutPrice = parseFloat(document.getElementById("buyoutPrice").value);
var loanTermMonths = parseInt(document.getElementById("loanTermMonths").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var loanFees = parseFloat(document.getElementById("loanFees").value);
var resultDiv = document.getElementById("result");
// Input validation
if (isNaN(buyoutPrice) || buyoutPrice <= 0) {
resultDiv.innerHTML = "Please enter a valid Lease Buyout Price.";
return;
}
if (isNaN(loanTermMonths) || loanTermMonths <= 0) {
resultDiv.innerHTML = "Please enter a valid Loan Term in months.";
return;
}
if (isNaN(annualInterestRate) || annualInterestRate < 0) {
resultDiv.innerHTML = "Please enter a valid Annual Interest Rate (0 or greater).";
return;
}
if (isNaN(downPayment) || downPayment < 0) {
resultDiv.innerHTML = "Please enter a valid Down Payment (0 or greater).";
return;
}
if (isNaN(loanFees) || loanFees < 0) {
resultDiv.innerHTML = "Please enter valid Loan Fees (0 or greater).";
return;
}
var principal = (buyoutPrice – downPayment) + loanFees;
// Handle case where down payment exceeds buyout price
if (principal 0) {
monthlyPayment = principal / loanTermMonths;
} else {
monthlyPayment = principal; // If term is 0, just pay the principal
}
} else {
monthlyInterestRate = (annualInterestRate / 100) / 12;
var n = loanTermMonths;
var i = monthlyInterestRate;
// Standard loan payment formula
var numerator = principal * i * Math.pow(1 + i, n);
var denominator = Math.pow(1 + i, n) – 1;
if (denominator === 0) { // Avoid division by zero if somehow n is 0 with interest
monthlyPayment = principal;
} else {
monthlyPayment = numerator / denominator;
}
}
// Format the output
var formattedMonthlyPayment = monthlyPayment.toLocaleString(undefined, {
style: 'currency',
currency: 'USD' // Assumes USD, could be made dynamic
});
var formattedPrincipal = principal.toLocaleString(undefined, {
style: 'currency',
currency: 'USD'
});
resultDiv.innerHTML = "Estimated Monthly Payment: " + formattedMonthlyPayment +
"Principal Loan Amount: " + formattedPrincipal + "";
}