A tool designed to compare the total cost of purchasing an asset through a loan versus leasing it for a specific period. Such tools typically require inputs like the asset’s price, loan interest rate, down payment, lease term, and residual value. A sample scenario might involve comparing a car loan with a 5% interest rate against a 36-month lease with a predetermined residual value.
These tools empower consumers and businesses to make informed financial decisions. By providing a clear comparison of overall expenses, including interest payments, depreciation, and fees, they offer valuable insights into the long-term affordability of different acquisition methods. Historically, such detailed comparisons required manual calculations, making informed decisions time-consuming. These tools have simplified the process considerably, fostering greater financial literacy and promoting more prudent asset acquisition strategies.
