function calculateLeaseVsBuy() {
var carPrice = parseFloat(document.getElementById('carPrice').value) || 0;
var downPayment = parseFloat(document.getElementById('downPayment').value) || 0;
var loanRate = parseFloat(document.getElementById('loanRate').value) || 0;
var loanTerm = parseFloat(document.getElementById('loanTerm').value) || 0;
var leaseMonthly = parseFloat(document.getElementById('leaseMonthly').value) || 0;
var leaseTerm = parseFloat(document.getElementById('leaseTerm').value) || 0;
var leaseDown = parseFloat(document.getElementById('leaseDown').value) || 0;
var residualValue = parseFloat(document.getElementById('residualValue').value) || 0;
// Loan Calculation (Amortization)
var loanAmount = carPrice – downPayment;
var monthlyRate = (loanRate / 100) / 12;
var monthlyLoanPayment = 0;
if (monthlyRate > 0) {
monthlyLoanPayment = loanAmount * (monthlyRate * Math.pow(1 + monthlyRate, loanTerm)) / (Math.pow(1 + monthlyRate, loanTerm) – 1);
} else {
monthlyLoanPayment = loanAmount / loanTerm;
}
// To make a fair comparison, we look at a 3-year (36 month) horizon
var comparisonPeriod = 36;
// Cost of Buying over 36 months:
// (Down Payment + 36 Monthly Payments) – (Value of car after 36 months)
var totalPaymentsBuy = (monthlyLoanPayment * comparisonPeriod) + downPayment;
var netCostBuy = totalPaymentsBuy – residualValue;
// Cost of Leasing over 36 months:
// (Due at signing + (Monthly Lease * (36 – 1))) – Note: First month often included in down payment
var netCostLease = leaseDown + (leaseMonthly * (comparisonPeriod – 1));
// Display results
document.getElementById('results').style.display = 'block';
document.getElementById('monthlyLoanResult').innerText = '$' + monthlyLoanPayment.toFixed(2);
document.getElementById('monthlyLeaseResult').innerText = '$' + leaseMonthly.toFixed(2);
document.getElementById('totalBuyCost').innerText = '$' + netCostBuy.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalLeaseCost').innerText = '$' + netCostLease.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
var verdict = document.getElementById('comparisonVerdict');
if (netCostBuy < netCostLease) {
var diff = netCostLease – netCostBuy;
verdict.innerText = "Buying is financially better by $" + diff.toLocaleString() + " over " + comparisonPeriod + " months.";
verdict.style.backgroundColor = "#e8f5e9";
verdict.style.color = "#2e7d32";
} else {
var diff = netCostBuy – netCostLease;
verdict.innerText = "Leasing is financially better by $" + diff.toLocaleString() + " over " + comparisonPeriod + " months.";
verdict.style.backgroundColor = "#fff3e0";
verdict.style.color = "#e65100";
}
}
Should You Lease or Buy Your Next Car?
Deciding whether to lease or buy a car is one of the most significant financial decisions for many households. While both options put you behind the wheel of a new vehicle, the long-term financial impact varies greatly depending on your driving habits and how long you plan to keep the car.
The True Cost of Buying
When you buy a car using a traditional auto loan, your monthly payments are higher because you are paying for the entire value of the vehicle plus interest. However, once the loan is paid off, you own an asset. The "Net Cost" in our calculator accounts for the fact that you can sell the car later, recovering some of your initial investment.
The Allure of Leasing
Leasing is essentially renting a car for a fixed period (usually 36 months). You only pay for the depreciation that occurs during that time. This leads to lower monthly payments and the ability to drive a more expensive car for less cash out of pocket. The downside is that at the end of the term, you have zero equity.
Comparison Example
Consider a $35,000 SUV:
Buying: With $5,000 down and a 5.5% rate over 60 months, your payment is roughly $573. After 3 years, you've paid about $25,628 (including down payment). If the car is worth $21,000, your net cost is $4,628.
Leasing: With $2,500 down and a $450 monthly payment, your total cost over 3 years is $18,250.
In this specific scenario, buying looks better because you retain the equity in the vehicle. However, if the car depreciates faster than expected, leasing protects you from that loss.