Car Lease vs. Buy Calculator
Compare total cost of ownership and find your best financial path.
Buying Details
Leasing Details
Understanding the Lease vs. Buy Math
Deciding whether to lease or buy a car isn't just about the monthly payment. It's about the "Total Cost of Ownership" over a specific timeframe. This calculator breaks down the long-term financial impact of both choices.
How the Buying Calculation Works
When you buy a car, your total cost is calculated as: (Monthly Loan Payment × Term) + Down Payment – Resale Value. While your monthly payments are often higher than a lease, you end up with an asset (the car) that has value. The "Total Cost" is effectively the depreciation and interest you paid during the period.
How the Lease Calculation Works
Leasing is essentially paying for the car's depreciation during the time you drive it, plus interest (called the money factor). The total cost is: (Monthly Lease Payment × Term) + Down Payment + Disposition Fees. Because you return the car at the end, there is no resale value to offset your costs.
Key Factors to Consider
- Mileage: Leases have strict limits (usually 10,000–15,000 miles/year). If you drive more, buying is almost always cheaper.
- Maintenance: Lease terms often align with the manufacturer's warranty, potentially lowering repair costs.
- Flexibility: Buying allows you to keep the car for 10+ years, significantly lowering your average annual cost. Leasing provides a new car every 3 years.
Example Comparison
Imagine a $35,000 SUV. If you buy it with $5,000 down at 5.5% for 60 months, your payment is roughly $573. After 5 years, if the car is worth $15,000, your net cost was $24,380. If you leased the same car for $450/month with $2,500 down for 36 months, and then did it again, your costs would likely exceed the buying route over the same 5-year period.