Wait-and-Save vs Finance-Now Calculator
Example: Purchase price: 30000 $ · Down payment: 5000 $ · Loan APR: 7.5 % · Loan term: 5 yrs · You could save/month: 600 $ · If invested, return: 5 %/yr
| Net benefit of waiting | $3,106 |
| Interest if you finance now | $5,057 |
| Opportunity cost if you wait | $1,951 |
| Months to save it | 39 |
| Verdict (1=wait, 0=finance) | 1 |
Worked example
On a $30,000 purchase with $5,000 down at 7.5% over 5 years, financing costs about $5,000 in interest. Saving $600/month, you would need roughly 42 months to bank the $25,000 — during which that money invested at 5% forgoes only a few hundred dollars of growth. Here, waiting wins by thousands.
Frequently asked questions
When does financing actually make sense?
Financing wins when the loan rate is low (think 0–3% promotional auto financing) and you can invest your cash at a higher expected return, or when waiting means missing a time-sensitive need. This tool quantifies exactly where that line falls for your numbers.
Why count opportunity cost at all?
Money you divert into a savings pile is money not compounding in the market. Ignoring that makes waiting look free when it is not. Counting it is what separates an honest comparison from a sales pitch.
What return should I assume if invested?
Use a conservative long-run figure. A diversified stock/bond portfolio has historically returned around 5–7% after inflation, but returns vary by year and are never guaranteed. Lower it if the money would sit in a high-yield savings account instead.