Buying vs Long-term Renting a Car, by the Numbers
Monthly payments alone cannot answer whether buying or long-term renting a car is cheaper. Buying means paying the car price, loan interest, and yearly insurance and tax, but you keep a resale asset at the end. Long-term rental bundles insurance and tax into one monthly fee, but nothing remains after the contract. This calculator compares the two over the same period on a total-cost basis.
The buying total is [price + amortized loan interest + insurance and tax − residual value at the end]. For example, a 40M KRW car paid in cash and kept 5 years (45% residual, 1.72M KRW/yr insurance + tax) costs about 30.6M KRW in total — 510K KRW per month. The same car on a 60-month loan at 5.5% adds about 5.84M KRW of interest, raising the monthly equivalent to 610K KRW.
The rental total is [monthly rent × months + opportunity cost of the deposit at a 3%/yr savings assumption]. The key output is the break-even rent: if a real quote is below it, renting wins; above it, buying wins. In the example above the threshold is 510K KRW/month (610K against the loan purchase). Also weigh non-monetary factors like upfront cash burden and hassle-free insurance and accident handling that rentals offer.
This is a simulation that excludes acquisition and registration tax, maintenance, fuel, depreciation variance, and end-of-lease purchase options. The default residual values (≈60% at 3 years, 45% at 5) vary widely by model and market, so adjust them with real used-car prices. For financing plans, try the loan interest calculator and the salary take-home calculator too.