Car Lease vs. Buy Calculator
Compare the total cost of ownership between leasing and financing a vehicle.
Leasing Option
Buying Option
Cost Comparison (over months)
Total Lease Cost
$0
Total Buy Cost
$0
Should You Lease or Buy Your Next Car?
Deciding between leasing and buying a car is one of the most significant financial decisions for many households. While leasing offers lower monthly payments and the chance to drive a new vehicle every few years, buying builds equity and allows for long-term ownership without mileage restrictions.
How This Calculator Works
To provide a fair comparison, our calculator looks at the Net Cost of Ownership during the timeframe equivalent to the lease term. For the "Buying" side, we calculate the loan payments, add your down payment, and then subtract the estimated resale value of the car at the end of the period. This represents the actual money "lost" to depreciation and interest.
Realistic Example:
If you lease a $35,000 SUV for 36 months at $450/month with $3,000 down, your total cost is $19,200.
If you buy that same SUV with $5,000 down at 5.5% interest, your monthly payment is roughly $573. After 36 months, you've paid about $25,600 (Down payment + 36 payments). However, if the car is still worth $22,000 and you still owe $15,000 on the loan, you have $7,000 in equity. Your net cost is $25,600 – $7,000 = $18,600. In this case, buying is slightly cheaper over 3 years.
If you lease a $35,000 SUV for 36 months at $450/month with $3,000 down, your total cost is $19,200.
If you buy that same SUV with $5,000 down at 5.5% interest, your monthly payment is roughly $573. After 36 months, you've paid about $25,600 (Down payment + 36 payments). However, if the car is still worth $22,000 and you still owe $15,000 on the loan, you have $7,000 in equity. Your net cost is $25,600 – $7,000 = $18,600. In this case, buying is slightly cheaper over 3 years.
Key Factors to Consider
- Mileage: Leases usually limit you to 10,000–15,000 miles per year. If you drive more, buying is almost always better.
- Maintenance: Leased cars are typically under warranty for the entire term. Older purchased cars may require expensive repairs.
- Customization: If you like to add roof racks, window tints, or performance parts, you must buy. Leases require the car to be returned in stock condition.
- Tax Benefits: Business owners can often deduct lease payments more easily than vehicle depreciation.
Pros and Cons At A Glance
| Feature | Leasing | Buying |
|---|---|---|
| Monthly Payments | Lower | Higher |
| Ownership | No equity built | You own the asset |
| End of Term | Return vehicle | Keep or sell |