Deciding whether to lease or buy a car is one of the most significant financial choices for drivers. This calculator helps you compare the Total Cost of Ownership over a specific timeframe, usually the length of a lease term (typically 36 months).
How the Comparison Works
To provide an apples-to-apples comparison, we look at what your net out-of-pocket expenses would be if you chose to walk away from the vehicle at the end of the term:
Leasing: The calculation adds your down payment to the sum of all monthly lease payments. Since you do not own the car at the end, your net cost is simply what you paid the dealership.
Buying: We calculate the monthly loan payment for the full purchase price. We then subtract the Estimated Residual Value (what the car is worth at the end of the term) from the total amount paid (Down payment + Monthly payments). This represents the "Net Cost" because you retain the equity in the vehicle.
Key Factors to Consider
While the numbers provide a financial baseline, consider these qualitative factors:
Mileage Limits: Leases usually limit you to 10,000–15,000 miles per year. Buying allows for unlimited driving.
Customization: If you plan to modify your car (exhaust, wheels, tint), buying is the better option as leases require the car to be returned in stock condition.
Wear and Tear: Lease returns are inspected for "excessive" wear and tear, which can result in unexpected fees.
Long-term Savings: Buying is almost always cheaper if you plan to keep the car for 6+ years, as you eventually pay off the loan and drive payment-free.
Example Scenario
Imagine a $40,000 SUV. If you lease it for 36 months at $500/month with $4,000 down, your total cost is $22,000. If you buy it with a 5% loan over the same period, your payments might be $1,100/month. However, if the SUV is still worth $25,000 after 3 years, your net cost of buying is much lower because you can sell the car and recoup your equity.
function calculateLeaseVsBuy() {
var carPrice = parseFloat(document.getElementById('carPrice').value);
var downPayment = parseFloat(document.getElementById('downPayment').value);
var termMonths = parseFloat(document.getElementById('termMonths').value);
var loanRate = parseFloat(document.getElementById('loanRate').value) / 100 / 12;
var leaseMonthly = parseFloat(document.getElementById('leaseMonthly').value);
var residualValue = parseFloat(document.getElementById('residualValue').value);
if (isNaN(carPrice) || isNaN(downPayment) || isNaN(termMonths) || isNaN(loanRate) || isNaN(leaseMonthly) || isNaN(residualValue)) {
alert("Please enter valid numbers in all fields.");
return;
}
// Buying Calculation
var loanPrincipal = carPrice – downPayment;
var monthlyLoanPayment = 0;
if (loanRate > 0) {
monthlyLoanPayment = (loanPrincipal * loanRate * Math.pow(1 + loanRate, termMonths)) / (Math.pow(1 + loanRate, termMonths) – 1);
} else {
monthlyLoanPayment = loanPrincipal / termMonths;
}
var totalPaidBuying = (monthlyLoanPayment * termMonths) + downPayment;
var netBuyCost = totalPaidBuying – residualValue;
// Leasing Calculation
var totalLeaseCost = (leaseMonthly * termMonths) + downPayment;
// Display Results
document.getElementById('results').style.display = 'block';
document.getElementById('totalBuyCost').innerText = '$' + netBuyCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalLeaseCost').innerText = '$' + totalLeaseCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
var verdictDiv = document.getElementById('verdict');
var difference = Math.abs(netBuyCost – totalLeaseCost);
if (netBuyCost < totalLeaseCost) {
verdictDiv.style.backgroundColor = '#e6f4ea';
verdictDiv.style.color = '#137333';
verdictDiv.innerHTML = 'Buying is more cost-effective!You save approximately $' + difference.toLocaleString(undefined, {maximumFractionDigits: 0}) + ' over ' + termMonths + ' months.';
} else {
verdictDiv.style.backgroundColor = '#fce8e6';
verdictDiv.style.color = '#c5221f';
verdictDiv.innerHTML = 'Leasing is more cost-effective!You save approximately $' + difference.toLocaleString(undefined, {maximumFractionDigits: 0}) + ' over ' + termMonths + ' months.';
}
// Smooth scroll to results
document.getElementById('results').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}