Lease vs. Pay Cash

If you have the cash, should you buy outright or lease and invest the cash instead? Factor in opportunity cost to decide.

Vehicle

Vehicle price / cash outlay ($)

Monthly lease payment ($)

Lease term (months)

Expected cash return (%)

Vehicle value at lease end ($)

Results

Better option

—

Total lease payments

—

Cash invested grows to

—

Opportunity cost of cash

—

Net cost — leasing

—

Net cost — cash

—

Simplified: assumes you could invest all cash at the expected return. Lease costs don't include insurance, maintenance, or mileage fees; cash purchase equity (residual) is returned in net cost.