Lease vs. Buy Calculator
Compare leasing vs. buying a car over the same ownership window. Total cost of each, breakeven year, and which wins. PDF report with Pro.
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What lease vs buy compares
Leasing and buying a car are not really about the sticker price — they are about what the vehicle costs you over the years you actually keep it. This calculator puts the two side by side over your chosen ownership window: the total cost of financing a purchase (minus what the car is worth when you sell) against the total cost of a series of leases. Whichever comes out lower is labelled the winner, with a year-by-year cumulative table so you can see where the crossover happens.
How each side is calculated
- Buying: the loan principal is price minus down payment. The payment uses the standard amortization formula, and the cost is down payment + all loan payments made during your ownership window − the estimated resale value at the end.
- Leasing: each lease costs the cash at signing plus the monthly payment times the lease term. Leases are repeated to cover your ownership window, with a final partial term prorated if the window does not divide evenly.
- Comparison: lease total minus buy total. Negative means leasing is cheaper; positive means buying is.
A worked example
A $35,000 car over six years: $5,000 down, 6.9% APR, 60-month loan, $14,000 expected resale. Lease alternative: $3,000 at signing, $450 a month, 36-month terms.
| Item | Calculation | Result |
|---|---|---|
| Buy monthly payment | amortization on $30,000 | $592.62 |
| Total paid on loan | 5,000 + (592.62 × 60) | $40,557.29 |
| Total buy cost | 40,557.29 − 14,000 resale | $26,557.29 |
| Total lease cost | 2 lease cycles × (3,000 + 450 × 36) | $38,400 |
| Difference | 38,400 − 26,557.29 | Buy cheaper by $11,843 |
Buying wins here largely because the car is still worth $14,000 at the end. That residual value is exactly what you give up when you lease and hand the keys back.
What the estimate leaves out
This is a financing comparison, not a full cost of ownership. It excludes several real levers that often decide the answer in practice:
- Insurance, which is usually higher on a leased car because of the coverage requirements.
- Maintenance and repairs, higher on an ageing owned car, lower on a leased car under warranty.
- Mileage overage and wear-and-tear charges at lease return.
- Acquisition and disposition fees on the lease, and the tax treatment of each arrangement, which varies by state.
- Flexibility, which has value the maths cannot price: owning lets you keep the car payment-free for years, while leasing resets you into a new payment each cycle.
Common mistakes
- Comparing monthly payments. A lease payment is almost always lower, but the comparison that matters is total cost across the years you keep the car.
- Forgetting resale. The buy side only wins if the car holds value. Enter a realistic resale figure, not an optimistic one.
- Ignoring the repeat cost of leasing. Three years feels cheap until you multiply it by the two or three leases it takes to cover six years of driving.
- Overlooking how long you keep cars. Buyers who keep a car for 8–10 years come out far ahead; buyers who trade every three years often match a lease without the flexibility.
Frequently asked questions
Is leasing ever cheaper?
Yes, in specific cases: if the resale value is poor, if you drive few miles, if you want a new car every few years, or if lease incentives are strong. The calculator will show it — set a low resale value and the lease side can win.
What resale value should I use?
Look up your model’s estimated value for the age and mileage it will have at the end of your ownership window. Trucks and some SUVs hold value well; luxury sedans and EVs have historically depreciated faster. Use a conservative figure.
Does this include sales tax?
No — it compares financing costs only. Sales tax applies to a purchase on the full price and to a lease on the monthly payments, so it generally favours leasing on tax alone, but the amount varies by state and is not modelled here.
What if I keep the car after the loan ends?
Then the buy advantage grows sharply, because the years after the loan is paid off cost you nothing in payments. Extend the ownership window in the calculator and watch the buy total flatten while the lease total keeps climbing.
If you want the monthly payment and interest breakdown for the purchase alone, start with the auto loan calculator. For a loan without the vehicle-specific tax and trade-in detail, the simple loan calculator is the quicker route.