Car Payoff vs Finance vs Lease Comparator

First, it applies your sales tax & upfront fees rate to the vehicle price to get an “initial cost,” then estimates the vehicle value after your chosen number of years using an annual depreciation rate. Cash cost-to-own is modeled as that initial cost minus the expected value at the end of the horizon. Finance cost-to-own uses standard loan amortization (APR → monthly payment) for the loan term, then subtracts the same expected value at the horizon. Lease cost-to-own is approximated using depreciation to estimate residual, a simplified payment estimate that also charges interest-like costs, plus mileage penalties and a small portion of upfront fees due at signing.

Because this tool uses depreciation to model resale/residual value, it treats brand/model effects, condition, and real auction pricing as “rolled into” your single depreciation rate. Lease payments here are simplified and do not use real-money-factor / lender acquisition math—so the lease option is best used for directional comparison, not as a substitute for an exact lease quote. Mileage charges are based on internal defaults (12,000 miles/year and $0 expected overages), which can make lease look cheaper than it would for higher-mileage drivers.

If your planned horizon is longer than the selected loan term, the finance math is flagged because the loan would end before your ownership period—remaining-value assumptions become less realistic. Also, the calculator assumes no down payment/trade-in and no negative equity, so results may differ from your real deal structure. Finally, if your actual driving exceeds 12,000 miles/year, treat the lease total as potentially optimistic due to the built-in mileage defaults.

With a 0% APR, the finance option becomes essentially payment cost only (no interest burden in the amortization), which can move the “best” choice toward finance. At 0% tax & fees, initial cost is just the vehicle price, shrinking both cash and finance totals and reducing any lease upfront component. For very short horizons (1 year), depreciation may dominate the totals—so small changes to the depreciation rate can cause the ranking to flip.