Rental vs Purchase Calculator

Rental vs Purchase Calculator helps Compare two everyday planning options using upfront cost, recurring cost, and time horizon assumptions.

Monthly rental

KRW

Rental period

months

Purchase price

KRW

Annual depreciation

Rental monthly average: ₩65,000
Purchase monthly average: ₩38,906
Residual value: ₩759,375
Opportunity cost: ₩195,692

Rental total

₩2,340,000

Purchase effective cost

₩1,400,625

Verdict

purchase

67% gap

Break-even

1 months

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Rental vs purchase calculator guide

This English page translates the Korean rental-versus-purchase calculator and calls calculateComparison, calculateInstallmentPayment, calculateResidualValue, and calculateOpportunityCost. It preserves contract-month rental cost, buyout option, lump-sum or installment purchase, maintenance, depreciation, residual value, opportunity cost, break-even month, and 5% similarity threshold.

Rental and purchase totals

Rental total is monthly rental times contract months, plus buyout price when includesBuyout is true. The monthly rental average is total rental cost divided by the comparison period.

Purchase total includes lump-sum price or installment total, plus maintenance across the comparison period, then subtracts residual value. Residual value uses purchase price times (1 - depreciation rate) raised to the number of years.

Installment and opportunity cost

If the purchase method is installment, the source calculates the monthly payment with the annuity formula. If annual rate is 0, it simply divides principal by months.

If the purchase method is lump-sum, the model adds opportunity cost using a default opportunity-cost rate from rental-presets. This reflects the return that could have been earned if the purchase cash had stayed invested.

Verdict and break-even

The break-even month is found by checking when purchase cumulative cost, including maintenance and residual-value offset, becomes less than or equal to rental cumulative cost. The search extends beyond the rental period up to a practical cap.

If the cost difference is under 5% of the larger total, the source returns a similar verdict. Otherwise it recommends rental or purchase based on which effective total is lower.