function calculateComparison() {
// Inputs for Buying
var buyPrice = parseFloat(document.getElementById('buyPrice').value) || 0;
var buyDown = parseFloat(document.getElementById('buyDown').value) || 0;
var buyRate = parseFloat(document.getElementById('buyRate').value) || 0;
var buyTerm = parseFloat(document.getElementById('buyTerm').value) || 1;
var buyResale = parseFloat(document.getElementById('buyResale').value) || 0;
// Inputs for Leasing
var leaseMonthly = parseFloat(document.getElementById('leaseMonthly').value) || 0;
var leaseDown = parseFloat(document.getElementById('leaseDown').value) || 0;
var leaseTerm = parseFloat(document.getElementById('leaseTerm').value) || 1;
var leaseFees = parseFloat(document.getElementById('leaseFees').value) || 0;
// Buying Calculation (Amortization)
var principal = buyPrice – buyDown;
var monthlyRate = (buyRate / 100) / 12;
var monthlyLoanPayment = 0;
if (monthlyRate === 0) {
monthlyLoanPayment = principal / buyTerm;
} else {
monthlyLoanPayment = principal * (monthlyRate * Math.pow(1 + monthlyRate, buyTerm)) / (Math.pow(1 + monthlyRate, buyTerm) – 1);
}
var totalLoanPayments = monthlyLoanPayment * buyTerm;
var totalCostBuy = totalLoanPayments + buyDown – buyResale;
// Leasing Calculation
var totalCostLease = (leaseMonthly * leaseTerm) + leaseDown + leaseFees;
// Normalizing for comparison (Cost per month over the longest term provided to see value)
var buyMonthlyEffective = totalCostBuy / buyTerm;
var leaseMonthlyEffective = totalCostLease / leaseTerm;
// Display Results
document.getElementById('resultsArea').style.display = 'block';
document.getElementById('totalBuyResult').innerHTML = '$' + totalCostBuy.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('monthlyBuyResult').innerHTML = 'Effective Monthly Cost: $' + buyMonthlyEffective.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalLeaseResult').innerHTML = '$' + totalCostLease.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('monthlyLeaseResult').innerHTML = 'Effective Monthly Cost: $' + leaseMonthlyEffective.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
var winnerBanner = document.getElementById('winnerBanner');
if (buyMonthlyEffective < leaseMonthlyEffective) {
winnerBanner.innerHTML = '✅ Buying is more cost-effective!';
winnerBanner.style.backgroundColor = '#e6ffed';
winnerBanner.style.color = '#28a745';
winnerBanner.style.border = '1px solid #28a745';
} else {
winnerBanner.innerHTML = '✅ Leasing is more cost-effective!';
winnerBanner.style.backgroundColor = '#e8f0fe';
winnerBanner.style.color = '#1a73e8';
winnerBanner.style.border = '1px solid #1a73e8';
}
window.scrollTo({ top: document.getElementById('resultsArea').offsetTop + 500, behavior: 'smooth' });
}
Lease vs. Buy: Which Car Financing Strategy is Right for You?
Deciding whether to lease or buy a car is one of the most significant financial decisions for many households. While both options provide you with a vehicle, the long-term financial implications vary drastically based on your driving habits, budget, and how long you plan to keep the car.
When Buying Makes Sense
Buying a car, typically through an auto loan, means you are working toward full ownership. Once the loan is paid off, the vehicle is an asset you own outright. Buying is generally the better financial move if:
- You keep cars for a long time: The cost per year drops significantly once the loan is paid off.
- You drive long distances: There are no mileage limits when you own the car, unlike leases which often cap mileage at 10,000 to 15,000 miles per year.
- You want to build equity: Your payments go toward owning an asset that you can later sell or trade in.
When Leasing Makes Sense
Leasing is essentially a long-term rental. You pay for the vehicle's depreciation during the time you drive it, plus interest and fees. Leasing might be the right choice if:
- You want lower monthly payments: Monthly lease payments are typically lower than loan payments for the same vehicle.
- You enjoy new technology: Leasing allows you to upgrade to a new model every 3 years with the latest safety features and infotainment.
- Business tax breaks: If you use your car for business, lease payments can often be deducted more easily than car loan payments.
How to Use This Calculator
To get an accurate comparison, it is crucial to estimate the Resale Value for the buying option. This is the amount you expect to get if you sold the car at the end of your loan term. Our calculator subtracts this from your total buying costs to show the real cost of ownership, allowing a fair "apples-to-apples" comparison with a lease, where you return the car with no residual value at the end.
Pro Tip: Always factor in "Gap Insurance" for leases and the potential for "excess wear and tear" charges when returning a leased vehicle. These small costs can swing the financial advantage back toward buying.
Example Calculation
Imagine a $35,000 SUV. If you buy it with $5,000 down at 5.5% interest for 60 months, your monthly payment is roughly $573. After 5 years, you've paid $39,380. If you sell it for $15,000, your total cost of ownership was $24,380.
Conversely, if you leased that same car for $450/month for 36 months with $2,500 down, your cost for those 3 years is $18,700. While the monthly payment is lower, you must start a new lease or buy a car at the end of the term, whereas the buyer now has a paid-off car worth $15,000.