Compare the true total cost of ownership over the term of your contract.
Common Details
Financing (Buying)
Leasing
Total Cost to Buy (Net):$0
Total Cost to Lease:$0
function calculateLeaseVsBuy() {
var carPrice = parseFloat(document.getElementById('carPrice').value) || 0;
var term = parseFloat(document.getElementById('termMonths').value) || 0;
// Buying Logic
var buyDown = parseFloat(document.getElementById('buyDownPayment').value) || 0;
var buyRate = (parseFloat(document.getElementById('buyInterestRate').value) || 0) / 100 / 12;
var resale = parseFloat(document.getElementById('resaleValue').value) || 0;
var loanAmount = carPrice – buyDown;
var monthlyBuyPayment = 0;
if (buyRate > 0) {
monthlyBuyPayment = (loanAmount * buyRate * Math.pow(1 + buyRate, term)) / (Math.pow(1 + buyRate, term) – 1);
} else {
monthlyBuyPayment = loanAmount / term;
}
var totalBuySpent = (monthlyBuyPayment * term) + buyDown;
var netBuyCost = totalBuySpent – resale;
// Leasing Logic
var leaseMonthly = parseFloat(document.getElementById('leaseMonthly').value) || 0;
var leaseDriveOff = parseFloat(document.getElementById('leaseDriveOff').value) || 0;
var totalLeaseCost = (leaseMonthly * term) + leaseDriveOff;
// Display
document.getElementById('totalBuyCost').innerHTML = '$' + netBuyCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalLeaseCost').innerHTML = '$' + totalLeaseCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
var diff = Math.abs(netBuyCost – totalLeaseCost);
var winner = "";
if (netBuyCost < totalLeaseCost) {
winner = "Buying is cheaper by $" + diff.toLocaleString(undefined, {maximumFractionDigits: 0}) + " over " + term + " months.";
} else {
winner = "Leasing is cheaper by $" + diff.toLocaleString(undefined, {maximumFractionDigits: 0}) + " over " + term + " months.";
}
document.getElementById('winnerMessage').innerHTML = winner;
document.getElementById('lbc-results').style.display = 'block';
}
Should You Lease or Buy Your Next Car?
Deciding between leasing and buying a vehicle is one of the most significant financial choices consumers face. While a lower monthly payment often makes leasing attractive, the long-term equity of buying can lead to higher wealth over time. This calculator helps you break down the Total Cost of Ownership (TCO) to see which path fits your budget.
How the Calculation Works
To compare these two options fairly, we look at the "Net Cost" at the end of a specific period (usually 36 or 48 months):
Buying: We calculate your monthly loan payments based on interest rates. At the end of the term, we subtract the estimated resale value of the car from your total payments. The result is what you actually "lost" to depreciation and interest.
Leasing: This is simpler. It is the sum of all monthly payments plus your "due at signing" amount. Since you return the car, there is no resale value to subtract.
Pros and Cons
Leasing
Lower monthly payments.
Drive a new car every 3 years.
Manufacturer warranty covers repairs.
Con: Mileage limits apply.
Con: You never stop making payments.
Buying
You own the asset (Equity).
No mileage restrictions.
Ability to customize/modify the car.
Con: Higher monthly cash flow impact.
Con: Maintenance costs after warranty.
Realistic Comparison Example
Imagine a $35,000 SUV. If you Buy it with $5,000 down at 5.5% interest over 36 months, your payments are roughly $905. Total spent is $37,580. If the car is worth $21,000 after 3 years, your net cost was $16,580.
If you Lease that same car for $450/month with $2,500 down, your total cost is $18,700. In this specific scenario, buying saves you over $2,000, provided you actually sell the car or keep it for many years.
Key Factors to Consider
Before making your final decision, remember that Interest Rates and Residual Values fluctuate. If a manufacturer offers a 0% APR deal on a purchase, buying almost always wins. Conversely, if a dealer offers a highly subsidized "lease special" with a high residual value, leasing may be the more fiscally responsible choice for that specific model.