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Lease vs. Buy Calculator

Compare the long-term value of leasing versus financing

Should you buy or lease a car?

Neither choice is universally better. Buying may fit if you plan to keep the vehicle and want ownership equity, while leasing may fit if you value a newer vehicle and can follow the lease terms. Whether it is better to lease or buy depends on the same-term costs and assumptions that matter for your situation.

Neither buying nor leasing is universally better. Compare same-term costs under assumptions that match your vehicle, financing offer, and driving plans.

Estimate over 36 months under entered assumptions
Buying has lower modeled cost
modeled difference: $8,998 in net cost

Finance (Buy)

Monthly Payment $1,208
Total Out-of-Pocket $48,482
Estimated Equity $27,000
Net Cost $21,482

Lease

Monthly Payment $680
Total Out-of-Pocket $30,480
End-of-Lease Equity $0
Net Cost $30,480
Vehicle Price $45,000
Down Payment $5,000
Resale Value (Est.) $27,000
Read the full explanation

Neither choice is universally better. Buying may fit if you plan to keep the vehicle and want ownership equity, while leasing may fit if you value a newer vehicle and can follow the lease terms. Whether it is better to lease or buy depends on the same-term costs and assumptions that matter for your situation.

Lease vs. Buy: Which is right for you?

This calculator estimates the difference between leasing and buying under your entered assumptions. It is a comparison aid, not a universal recommendation.

How Leasing Works

When you lease, you are only paying for the vehicle's depreciation during the lease term, plus a finance charge.

  • Lower monthly payments compared to buying.
  • Always drive a newer car under warranty.
  • Mileage limits usually apply (e.g., 10k or 12k miles/year).
  • You don't own the car at the end of the term.

How Buying Works

When you finance a purchase, your payments go toward the full value of the vehicle plus interest.

  • You build equity as you pay down the loan.
  • Once the loan is paid off, you own the vehicle outright.
  • No mileage restrictions or wear-and-tear penalties.
  • Higher monthly payments but lower long-term cost if you keep the car.

The Math Explained

We compare both options over the same entered term. Buy net cost is the down payment plus loan payments, less the car's estimated resale value. Lease cost includes the down payment, lease payments, and the lease-fees input; the lease scenario assumes no end-of-term equity.

  • Money Factor: Essentially the interest rate for a lease.
  • Residual Value: The estimated value used for both buy equity and lease depreciation.
  • Lease Fees: Upfront costs entered for acquisition and similar fees.
  • The comparison does not model taxes, registration, insurance, maintenance, fuel, mileage charges, wear-and-tear charges, disposition fees, incentives, or opportunity cost unless they are reflected in an input.