Note: To compare fairly, we evaluate the total net cost over the chosen timeframe.
Buying Total Cost
$0
Monthly: $0
Leasing Total Cost
$0
Monthly: $0
Lease vs. Buy: Which One is Right for You?
Deciding between leasing and buying a car is more than just a monthly payment comparison; it's a financial strategy decision. This calculator helps you look at the Net Total Cost of Ownership, which accounts for the equity you gain when buying versus the flexibility of leasing.
Understanding the Math
When you buy a car, your total cost is the sum of all monthly payments plus your down payment, minus what the car is worth when you are finished with it (the resale value). This "equity" is what often makes buying cheaper in the long run.
When you lease a car, you are essentially paying for the vehicle's depreciation during the time you drive it, plus interest (the "money factor"). Your total cost is the sum of all lease payments, the due-at-signing amount, and any end-of-lease fees.
Pros and Cons
Buying: Best for those who keep cars for 5+ years, drive high mileage, and want to eventually eliminate car payments.
Leasing: Best for those who want a new car every 3 years, prefer lower monthly payments, and drive less than 12,000 miles per year.
Calculation Example
If you buy a $35,000 car with $5,000 down at 5.5% interest for 60 months, your payment is roughly $573/month. After 5 years, you've paid about $39,380. If the car is worth $15,000 at that time, your net cost is $24,380. To beat this with a lease, your total lease outlays over that same period would need to be lower than that figure.
function calculateLeaseVsBuy() {
// Buy Inputs
var buyPrice = parseFloat(document.getElementById('buy_price').value) || 0;
var buyDown = parseFloat(document.getElementById('buy_down').value) || 0;
var buyRate = parseFloat(document.getElementById('buy_rate').value) || 0;
var buyTerm = parseFloat(document.getElementById('buy_term').value) || 0;
var buyResale = parseFloat(document.getElementById('buy_resale').value) || 0;
// Lease Inputs
var leaseMonthly = parseFloat(document.getElementById('lease_monthly').value) || 0;
var leaseDown = parseFloat(document.getElementById('lease_down').value) || 0;
var leaseTerm = parseFloat(document.getElementById('lease_term').value) || 0;
var leaseFees = parseFloat(document.getElementById('lease_fees').value) || 0;
// Buy Calculation (Standard Loan Formula)
var principal = buyPrice – buyDown;
var monthlyRate = (buyRate / 100) / 12;
var buyMonthlyPayment = 0;
if (principal > 0) {
if (monthlyRate > 0) {
buyMonthlyPayment = principal * (monthlyRate * Math.pow(1 + monthlyRate, buyTerm)) / (Math.pow(1 + monthlyRate, buyTerm) – 1);
} else {
buyMonthlyPayment = principal / buyTerm;
}
}
var totalBuyOutlay = (buyMonthlyPayment * buyTerm) + buyDown;
var netBuyCost = totalBuyOutlay – buyResale;
// Lease Calculation
var totalLeaseCost = (leaseMonthly * leaseTerm) + leaseDown + leaseFees;
// Normalized comparison (Cost per month for the duration of the agreement)
var buyCostPerMonth = netBuyCost / buyTerm;
var leaseCostPerMonth = totalLeaseCost / leaseTerm;
// Display Results
document.getElementById('results-area').style.display = 'block';
document.getElementById('buy_total_cost').innerText = '$' + netBuyCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('buy_monthly_info').innerText = 'Monthly Payment: $' + buyMonthlyPayment.toFixed(2);
document.getElementById('lease_total_cost').innerText = '$' + totalLeaseCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('lease_monthly_info').innerText = 'Avg. Effective Monthly: $' + leaseCostPerMonth.toFixed(2);
var verdictBox = document.getElementById('verdict');
if (buyCostPerMonth < leaseCostPerMonth) {
verdictBox.innerText = 'Verdict: Buying is financially better for this timeframe.';
verdictBox.style.background = '#d4edda';
verdictBox.style.color = '#155724';
document.getElementById('buy-result-box').style.borderColor = '#28a745';
document.getElementById('buy-result-box').style.background = '#f0fff4';
document.getElementById('lease-result-box').style.borderColor = '#ddd';
document.getElementById('lease-result-box').style.background = '#fff';
} else {
verdictBox.innerText = 'Verdict: Leasing is financially better for this timeframe.';
verdictBox.style.background = '#d1ecf1';
verdictBox.style.color = '#0c5460';
document.getElementById('lease-result-box').style.borderColor = '#17a2b8';
document.getElementById('lease-result-box').style.background = '#f0faff';
document.getElementById('buy-result-box').style.borderColor = '#ddd';
document.getElementById('buy-result-box').style.background = '#fff';
}
// Smooth scroll to results
document.getElementById('results-area').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}