Compare the total cost of ownership between leasing and financing a vehicle.
Common Details
Financing (Buy) Options
Lease Options
Comparison Results
Estimated Monthly Loan Payment:$0.00
Total Cost to Buy (Over Loan Term):$0.00
Total Cost to Lease (Over Lease Term):$0.00
Effective Monthly Cost (Buying):$0.00
Effective Monthly Cost (Leasing):$0.00
function calculateLeaseVsBuy() {
var price = parseFloat(document.getElementById('carPrice').value);
var down = parseFloat(document.getElementById('downPayment').value);
var buyInt = parseFloat(document.getElementById('buyInterest').value) / 100 / 12;
var buyTerm = parseFloat(document.getElementById('buyTerm').value);
var leaseMonthly = parseFloat(document.getElementById('leaseMonthly').value);
var leaseTerm = parseFloat(document.getElementById('leaseTerm').value);
if (isNaN(price) || isNaN(down) || isNaN(buyTerm) || isNaN(leaseMonthly) || isNaN(leaseTerm)) {
alert("Please enter valid numeric values for all fields.");
return;
}
// Financing Calculation (Standard Loan Formula)
var loanPrincipal = price – down;
var monthlyLoanPayment = 0;
if (buyInt === 0) {
monthlyLoanPayment = loanPrincipal / buyTerm;
} else {
monthlyLoanPayment = loanPrincipal * (buyInt * Math.pow(1 + buyInt, buyTerm)) / (Math.pow(1 + buyInt, buyTerm) – 1);
}
var totalBuyCost = (monthlyLoanPayment * buyTerm) + down;
var totalLeaseCost = (leaseMonthly * leaseTerm) + down; // Assuming down payment applies to lease too
var effectiveMonthlyBuy = totalBuyCost / buyTerm;
var effectiveMonthlyLease = totalLeaseCost / leaseTerm;
// Display Results
document.getElementById('results').style.display = 'block';
document.getElementById('resMonthlyLoan').innerText = '$' + monthlyLoanPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resTotalBuy').innerText = '$' + totalBuyCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resTotalLease').innerText = '$' + totalLeaseCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resEffectiveBuy').innerText = '$' + effectiveMonthlyBuy.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resEffectiveLease').innerText = '$' + effectiveMonthlyLease.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
var verdict = document.getElementById('verdict');
if (effectiveMonthlyLease < effectiveMonthlyBuy) {
verdict.innerText = "Leasing has a lower monthly cash outlay!";
} else {
verdict.innerText = "Financing is more cost-effective per month!";
}
}
Lease vs. Buy: Which is Right for You?
Deciding whether to lease or buy a car is one of the most significant financial decisions for many households. While both options get you behind the wheel of a new vehicle, they represent fundamentally different financial philosophies. Use our calculator above to see the raw numbers, then read on to understand the nuance behind the math.
Understanding Car Financing (Buying)
When you finance a car, you take out a loan for the full purchase price of the vehicle (minus your down payment). Each month, your payment goes toward interest and principal. Once the loan term is complete, you own the asset outright.
Equity Building: You eventually own the car and can sell it or trade it in.
No Mileage Limits: Drive as much as you want without penalties.
Customization: You can modify the car as you wish.
Long-term Savings: After the loan is paid off, you can enjoy years without any car payments.
Understanding Car Leasing
Leasing is essentially "renting" the vehicle for its most expensive years of life. Your payments cover the vehicle's depreciation during the lease term, plus interest and fees. At the end of the term (usually 36 months), you return the car to the dealership.
Lower Payments: Monthly lease payments are typically lower than loan payments for the same car.
New Technology: You can upgrade to a new car with the latest safety and tech every 3 years.
Maintenance: Most leased cars are covered by the manufacturer's warranty for the duration of the lease.
Tax Benefits: If used for business, lease payments may offer better tax deductions.
The Math Example
Imagine a $35,000 SUV. If you Buy with $5,000 down at a 5.5% interest rate for 60 months, your payment is roughly $573 per month. Over 5 years, you spend about $39,380. However, at the end, you own a car that might still be worth $15,000.
If you Lease the same SUV for $350 per month for 36 months with $5,000 down, your total outlay is $17,600. At the end of 3 years, you have no car and no equity, but you spent much less cash during that period.
Key Factors to Consider
Beyond the numbers, ask yourself these three questions:
How many miles do you drive? Leases usually limit you to 10,000 or 12,000 miles per year. If you commute 20,000 miles, buying is almost always better.
How long do you keep cars? If you keep a vehicle for 8-10 years, buying is significantly cheaper in the long run.
What is your monthly budget? If you need the lowest possible payment to manage your cash flow right now, leasing might be the temporary solution you need.