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When is it Profitable to End a Car Lease or Loan Contract Agreement?

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A vehicle depreciates in a non linear trend during its term, unlike the outstanding balance, and there is always a risk when leasing or financing that the vehicle value will be lower than its book value, i.e. the market value of the automobile or the truck would be less than the balance left to be paid on the contract, a situation also known as negative equity.

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Please change the suggested values with your own amounts in the blue text boxes.

Help with our calculators Help

Car Devaluation & Annual Depreciation Rates

1st year (20% - 40%) Help On new vehicles, the first year always depreciate more then the following years	%
Following years (15% - 25%) Help The depreciation rate applies on the value of the previous year	%

Vehicle Contract Agreement

		Leasing		Financing
Selling price of the vehicle or MSRP				$
Vehicle taken in exchange Help Exchange value of an old vehicle with the new one				$
Vehicle minus exchange Help Net amount to finance after the exchange. In the case of financing, the taxes are calculated after the exchange, which is a way to save taxes.		$		$
% Sale taxes Help Taxes on the amount. There is no taxes on the amount if you rent since you don't purchase the product.	%	N/A		$
Other amortized fees Help Administration fees or others that you add up on the amount to finance for the renting or financing services
Initial down payment Help Down payment available at the transaction	%		%	$
Taxes on the down payment Help In the case of a lease, the taxes are included in the down payment and are paid when getting the vehicle. We subtract the taxes from the down payment available before applying it on the amount.		$		N/A

		Leasing		Financing
Net amount to finance Help Net amount in which the payments are calculate on		$		$
Term Help Number of monthly payments (max 84)		months		months
Interest rate		%		%
Residual value Help Residual value at the end of the leasing contract. You normally have the option to buy the vehicle at that price when your term ends.	%		%	$
Monthly payments Help For renting, the payments are executed at the beginning of the month and for financing, at the end.		$		$

Early Buyout: The Important Months

Early Lease Buyout (sale taxes applicable)

	Point of profitability	Highest Profit	Lowest Profit
Month
Outstanding Balance	$	$	$
Vehicle Value	$	$	$
Profit	$	$	$

Vehicle's Market Value vs Outstanding Balance (months)

Equity Position on the Vehicle

Evaluate the Equity on Your Vehicle in x Month

Month #

	Lease	Early Lease Buyout	Financing
Outstanding Balance	$	$	$
Vehicle Value	$	$	$
Equity	$	$	$

Complete Analysis

For a complete view, here are all the numbers for every months:

Mobile users: you can scroll the table horizontally

Month	Vehicle's Market Value	Lease Payment without taxes	Lease Capital	Lease Interest	Lease Outstanding Balance	Lease Early Buyout	Lease Equity on Vehicle	Profit on Early Lease Buyout	Loan Outstanding Balance	Financing Profit on Re-sell

Other pages that might interest you:

Intro to "Calculate Your Car Lease-End Options"

Intro to "Buy or Lease a Car (Vehicle)?"

Intro to "Monthly Payments when Leasing or Financing a Vehicle"

« Back to Car Lease & Loan Calculators
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Numbers in our calculators are rounded to two decimals.
The same calculations made in an Excel spreadsheet may differ slightly.

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