Compare the total cost of ownership to find the best financial path for your next vehicle.
Financing (Buying)
Leasing
Total Net Cost (Buy)
Total Net Cost (Lease)
Lease vs. Buy: Understanding the Real Cost
Deciding whether to lease or buy a car isn't just about the monthly payment. It's about long-term equity and "net cost." When you buy, you own an asset that retains value. When you lease, you are essentially paying for the vehicle's depreciation during the time you drive it.
How This Calculation Works
To provide a fair "apples-to-apples" comparison, we look at the Net Cost of Ownership. For a loan, this is calculated as:
(Monthly Payment × Loan Term) + Down Payment - Resale Value.
For a lease, it is:
(Monthly Payment × Lease Term) + Fees + Down Payment.
Realistic Comparison Example
Imagine a $40,000 SUV:
Buying: You put $5,000 down and finance for 60 months at 6%. Your payment is roughly $676. After 5 years, you've paid $45,560 total. If the car is worth $18,000 then, your net cost was $27,560.
Leasing: You pay $500/month for 36 months with $3,000 down. Total cost over 3 years is $21,000. However, you must lease again for the remaining 2 years to match the buying timeline, often leading to higher total costs over long periods.
Pros and Cons
Buying is generally better for those who keep cars longer than 5 years, drive high mileage, or want to build equity. Leasing is ideal for those who want a new car every 3 years, want lower monthly payments, and drive less than 12,000 miles per year.
function calculateLeaseVsBuy() {
// Buy Inputs
var buyPrice = parseFloat(document.getElementById('buyPrice').value) || 0;
var buyDown = parseFloat(document.getElementById('buyDown').value) || 0;
var buyRate = parseFloat(document.getElementById('buyRate').value) || 0;
var buyTerm = parseFloat(document.getElementById('buyTerm').value) || 0;
var buyResale = parseFloat(document.getElementById('buyResale').value) || 0;
// Lease Inputs
var leaseMonthly = parseFloat(document.getElementById('leaseMonthly').value) || 0;
var leaseDown = parseFloat(document.getElementById('leaseDown').value) || 0;
var leaseTerm = parseFloat(document.getElementById('leaseTerm').value) || 0;
var leaseFee = parseFloat(document.getElementById('leaseFee').value) || 0;
// Buy Calculation (Standard Loan Formula)
var principal = buyPrice – buyDown;
var monthlyRate = (buyRate / 100) / 12;
var buyMonthlyPayment = 0;
if (monthlyRate > 0) {
buyMonthlyPayment = principal * (monthlyRate * Math.pow(1 + monthlyRate, buyTerm)) / (Math.pow(1 + monthlyRate, buyTerm) – 1);
} else {
buyMonthlyPayment = principal / buyTerm;
}
var totalBuyPaid = (buyMonthlyPayment * buyTerm) + buyDown;
var netBuyCost = totalBuyPaid – buyResale;
// Lease Calculation
var netLeaseCost = (leaseMonthly * leaseTerm) + leaseDown + leaseFee;
// Normalize to monthly cost for fair comparison since terms might differ
var monthlyBuyCost = netBuyCost / buyTerm;
var monthlyLeaseCost = netLeaseCost / leaseTerm;
// UI Updates
document.getElementById('resultBox').style.display = 'block';
document.getElementById('totalBuyCost').innerHTML = '$' + netBuyCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalLeaseCost').innerHTML = '$' + netLeaseCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
var comparisonDiv = document.getElementById('comparisonText');
if (monthlyBuyCost < monthlyLeaseCost) {
var diff = (monthlyLeaseCost – monthlyBuyCost).toFixed(2);
comparisonDiv.innerHTML = "Buying is financially better. You save approx. $" + diff + " per month in net ownership costs compared to leasing.";
comparisonDiv.className = "comparison-text winner-buy";
} else {
var diff = (monthlyBuyCost – monthlyLeaseCost).toFixed(2);
comparisonDiv.innerHTML = "Leasing is financially better for this specific term. You save approx. $" + diff + " per month compared to buying and selling.";
comparisonDiv.className = "comparison-text winner-lease";
}
}