Compare the total cost of financing a vehicle versus leasing to find the best financial path for your next car.
Vehicle Details
Financing & Resale
Total Cost to Buy
$0
Total Cost to Lease
$0
Understanding the Real Cost: Leasing vs. Buying
Deciding between leasing and buying a car is one of the most significant financial decisions a household makes. While monthly payments often drive the decision, the Total Cost of Ownership (TCO) over a set period (usually 36 or 48 months) provides a clearer picture.
How This Calculator Works
The calculator compares two distinct financial paths:
Buying (Financing): We calculate the monthly loan payment based on the purchase price, down payment, and interest rate. The total cost is the sum of all payments plus the down payment, minus the equity you have in the car (resale value) at the end of the term.
Leasing: This is simpler. It calculates the sum of all monthly lease payments plus the initial down payment (often called a "capitalized cost reduction"). At the end of a lease, you typically have zero equity.
Key Factors to Consider
1. Depreciation: This is the largest expense in car ownership. A car typically loses 20% of its value in the first year and about 60% after five years. When you lease, you are essentially paying for this depreciation plus interest (the "money factor").
2. Mileage Limits: Leases usually come with strict mileage limits (10,000 to 12,000 miles per year). If you drive more, buying is almost always the better financial choice to avoid heavy per-mile penalties.
3. Maintenance: Leased vehicles are usually under the manufacturer's warranty for the duration of the lease. When buying, you are responsible for long-term maintenance costs once the warranty expires.
Example Scenario
Imagine a $35,000 SUV with a $5,000 down payment over 36 months:
Financing: At 5.5% interest, your monthly payment would be roughly $906. After 3 years, you've paid $37,616 total. If the car is worth $20,000, your net cost is $17,616.
Leasing: If the lease is $450/month, you pay $16,200 in payments + $5,000 down. Your net cost is $21,200.
In this example, despite the higher monthly payment, buying saves you $3,584 over three years because you own an asset at the end.
function calculateLeaseBuy() {
// Inputs
var price = parseFloat(document.getElementById('vehiclePrice').value);
var down = parseFloat(document.getElementById('downPayment').value);
var months = parseFloat(document.getElementById('periodMonths').value);
var apr = parseFloat(document.getElementById('loanApr').value);
var leaseMonthly = parseFloat(document.getElementById('leaseMonthly').value);
var resale = parseFloat(document.getElementById('resaleValue').value);
// Validation
if (isNaN(price) || isNaN(down) || isNaN(months) || isNaN(apr) || isNaN(leaseMonthly) || isNaN(resale)) {
alert("Please enter valid numbers in all fields.");
return;
}
// Buying Calculation
var principal = price – down;
var monthlyRate = (apr / 100) / 12;
var buyMonthlyPayment = 0;
if (apr > 0) {
buyMonthlyPayment = principal * (monthlyRate * Math.pow(1 + monthlyRate, months)) / (Math.pow(1 + monthlyRate, months) – 1);
} else {
buyMonthlyPayment = principal / months;
}
var totalBuyPayments = buyMonthlyPayment * months;
var grossBuyCost = totalBuyPayments + down;
var netBuyCost = grossBuyCost – resale;
// Lease Calculation
var totalLeasePayments = leaseMonthly * months;
var netLeaseCost = totalLeasePayments + down;
// Display Results
document.getElementById('resultsArea').style.display = 'block';
document.getElementById('buyTotalResult').innerText = '$' + netBuyCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('buyMonthlyDetail').innerText = 'Monthly Payment: $' + buyMonthlyPayment.toFixed(2);
document.getElementById('leaseTotalResult').innerText = '$' + netLeaseCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('leaseMonthlyDetail').innerText = 'Monthly Payment: $' + leaseMonthly.toFixed(2);
var verdictDiv = document.getElementById('verdict');
var difference = Math.abs(netBuyCost – netLeaseCost).toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
if (netBuyCost < netLeaseCost) {
verdictDiv.style.backgroundColor = '#d4edda';
verdictDiv.style.color = '#155724';
verdictDiv.innerText = 'Financing is cheaper by $' + difference + ' over ' + months + ' months.';
} else {
verdictDiv.style.backgroundColor = '#fff3cd';
verdictDiv.style.color = '#856404';
verdictDiv.innerText = 'Leasing is cheaper by $' + difference + ' over ' + months + ' months.';
}
// Scroll to results
document.getElementById('resultsArea').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}