Enter the details for both the lease and buy options to compare costs.
Comparison Results
Total Lease Cost:$0
Total Buy Cost:$0
Lease End Options:
Option 1: Return Vehicle (assuming no overage fees)
Option 2: Purchase Vehicle (at residual value)
Buy End Options:
Own the vehicle outright
Understanding Car Leasing vs. Buying
Deciding whether to lease or buy a new car is a significant financial decision. Each option has its own set of advantages and disadvantages, and the best choice depends on your individual financial situation, driving habits, and preferences. This calculator aims to provide a clearer picture by comparing the estimated total costs over a specific period.
Leasing Explained
Leasing a car means you're essentially renting it for a fixed period, typically 24 to 48 months. You pay for the depreciation of the vehicle during that time, plus interest and fees. Key components of lease cost include:
Capitalized Cost (Cap Cost): The agreed-upon price of the car for the lease. Lowering this can reduce your payments.
Residual Value: The estimated value of the car at the end of the lease term, set by the leasing company. A higher residual value generally means lower monthly payments.
Money Factor: This is the lease equivalent of an interest rate. It's often expressed as a small decimal (e.g., 0.00125), which you can convert to an Annual Percentage Rate (APR) by multiplying by 2400.
Lease Term: The duration of the lease contract in months.
Mileage Allowance: The maximum number of miles you can drive per year without incurring penalties.
Overage Charge: The fee you pay for each mile driven over your allowance.
Down Payment (Cap Cost Reduction): An upfront payment that reduces your capitalized cost and thus your monthly payments.
At the end of a lease, you typically have three options: return the car (and pay any excess wear-and-tear or mileage charges), buy the car for its residual value, or trade it in for a new vehicle.
Buying Explained
Buying a car means you finance the purchase, usually through a car loan, and own the vehicle once the loan is paid off. The total cost of buying involves:
Car Price: The negotiated price of the vehicle.
Down Payment: An upfront amount you pay, reducing the loan principal.
Loan Interest Rate (APR): The annual percentage rate charged on the loan.
Loan Term: The length of the loan in months.
Financing Fees: Any other charges associated with obtaining the loan.
Once the loan is paid off, you own the car and can keep it, sell it, or trade it in. You are responsible for all maintenance, repairs, and insurance costs throughout your ownership.
How the Calculator Works
This calculator estimates the total cost of each option over a specified period (typically the lease term for the lease, and the loan term for buying). For leasing, it sums the down payment, all monthly payments, estimated maintenance, and potential mileage overage fees. For buying, it calculates the total loan payments (principal + interest), down payment, and estimated maintenance. It also considers the potential resale value of the car at the end of the comparison period (which aligns with the lease term for a fair comparison).
Note: This calculator provides an estimate. Actual costs can vary based on specific dealer fees, insurance rates, actual maintenance needs, and the true market value of the car at the end of the term.
function calculateLeaseVsBuy() {
var carPrice = parseFloat(document.getElementById("carPrice").value);
var downPaymentLease = parseFloat(document.getElementById("downPaymentLease").value);
var monthlyPaymentLease = parseFloat(document.getElementById("monthlyPaymentLease").value);
var leaseTermMonths = parseInt(document.getElementById("leaseTermMonths").value);
var residualValuePercentage = parseFloat(document.getElementById("residualValuePercentage").value) / 100;
var buyInterestRate = parseFloat(document.getElementById("buyInterestRate").value) / 100;
var buyLoanTermMonths = parseInt(document.getElementById("buyLoanTermMonths").value);
var buyDownPayment = parseFloat(document.getElementById("buyDownPayment").value);
var maintenanceLeasePerYear = parseFloat(document.getElementById("maintenanceLease").value);
var maintenanceBuyPerYear = parseFloat(document.getElementById("maintenanceBuy").value);
var mileageAllowance = parseFloat(document.getElementById("mileageAllowance").value);
var mileageOverageCharge = parseFloat(document.getElementById("mileageOverageCharge").value);
var salePriceAfterTerm = parseFloat(document.getElementById("salePrice").value);
var totalLeaseCost = 0;
var totalBuyCost = 0;
var comparisonMessage = "";
// — Lease Calculation —
var totalLeasePayments = monthlyPaymentLease * leaseTermMonths;
var leaseMaintenanceCost = (maintenanceLeasePerYear / 12) * leaseTermMonths;
var estimatedLeaseOverageFees = 0; // Simplified: assumes meeting allowance for base calculation
var estimatedResidualValue = carPrice * residualValuePercentage;
// Check if lease term exceeds what is standard for the vehicle age after purchase
// This is a simplification; actual residual values depend on many factors.
// For simplicity, we'll assume the provided residual value is the target.
totalLeaseCost = downPaymentLease + totalLeasePayments + leaseMaintenanceCost + estimatedLeaseOverageFees;
// — Buy Calculation —
var loanAmount = carPrice – buyDownPayment;
var monthlyInterestRate = buyInterestRate / 12;
var totalBuyPayments = 0;
var buyMaintenanceCost = (maintenanceBuyPerYear / 12) * buyLoanTermMonths; // Calculate maintenance over the loan term
var netBuyCost = 0;
if (loanAmount > 0 && monthlyInterestRate > 0 && buyLoanTermMonths > 0) {
// Calculate monthly mortgage payment
var monthlyMortgagePayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, buyLoanTermMonths)) / (Math.pow(1 + monthlyInterestRate, buyLoanTermMonths) – 1);
totalBuyPayments = monthlyMortgagePayment * buyLoanTermMonths;
} else if (loanAmount > 0) {
// Simple interest if rate is 0 or not applicable for calculation simplicity
totalBuyPayments = loanAmount; // Assuming no interest, just paying principal
buyMaintenanceCost = (maintenanceBuyPerYear / 12) * buyLoanTermMonths; // Recalculate maintenance over loan term
} else {
// If no loan amount needed (e.g., paid cash)
totalBuyPayments = 0;
buyMaintenanceCost = (maintenanceBuyPerYear / 12) * buyLoanTermMonths;
}
// Total cost of buying is down payment + total loan payments + total maintenance
totalBuyCost = buyDownPayment + totalBuyPayments + buyMaintenanceCost;
// — Comparison —
// To make a fair comparison, we should consider the net cost after selling the car.
// We compare the total cost of leasing for 'leaseTermMonths' vs.
// the total cost of buying and then selling the car after 'leaseTermMonths'.
// We need to estimate the loan payoff if the term is different from lease term.
// For simplicity, we compare total outflow for the lease duration.
// Estimate the remaining loan balance if the buy loan term is longer than lease term.
var remainingLoanBalanceAtLeaseEnd = 0;
if (buyLoanTermMonths > leaseTermMonths && loanAmount > 0 && monthlyInterestRate > 0) {
var monthlyMortgagePayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, buyLoanTermMonths)) / (Math.pow(1 + monthlyInterestRate, buyLoanTermMonths) – 1);
remainingLoanBalanceAtLeaseEnd = loanAmount * Math.pow(1 + monthlyInterestRate, leaseTermMonths) – monthlyMortgagePayment * (Math.pow(1 + monthlyInterestRate, leaseTermMonths) – 1) / monthlyInterestRate;
} else if (loanAmount > 0 && buyLoanTermMonths 0) {
if (buyInterestRate > 0) {
var monthlyMortgagePayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, buyLoanTermMonths)) / (Math.pow(1 + monthlyInterestRate, buyLoanTermMonths) – 1);
// Calculate total paid towards loan and maintenance during lease term
var paymentsMadeDuringLease = Math.min(leaseTermMonths, buyLoanTermMonths) * monthlyMortgagePayment;
var maintenanceDuringLease = (maintenanceBuyPerYear / 12) * Math.min(leaseTermMonths, buyLoanTermMonths);
buyCostOverLeaseTerm += paymentsMadeDuringLease + maintenanceDuringLease;
} else { // 0 interest loan
var totalPrincipalPaid = Math.min(loanAmount, (loanAmount / buyLoanTermMonths) * leaseTermMonths);
var maintenanceDuringLease = (maintenanceBuyPerYear / 12) * leaseTermMonths;
buyCostOverLeaseTerm += totalPrincipalPaid + maintenanceDuringLease;
}
}
// Subtract the estimated sale price at the end of the lease term
buyCostOverLeaseTerm -= salePriceAfterTerm;
// Format currency
document.getElementById("totalLeaseCost").textContent = "$" + totalLeaseCost.toFixed(2);
document.getElementById("totalBuyCost").textContent = "$" + netCostOfBuyingAtLeaseEnd.toFixed(2); // Display the net cost after selling
var finalComparisonMessage = "";
if (totalLeaseCost < netCostOfBuyingAtLeaseEnd) {
finalComparisonMessage = "Leasing appears to be cheaper over this period.";
} else if (netCostOfBuyingAtLeaseEnd < totalLeaseCost) {
finalComparisonMessage = "Buying appears to be cheaper over this period.";
} else {
finalComparisonMessage = "The costs are very similar over this period.";
}
document.getElementById("comparisonResult").textContent = finalComparisonMessage;
// Add edge case checks for invalid inputs leading to NaN results
if (isNaN(totalLeaseCost) || isNaN(netCostOfBuyingAtLeaseEnd) || totalLeaseCost < 0 || netCostOfBuyingAtLeaseEnd < 0) {
document.getElementById("comparisonResult").textContent = "Please enter valid numbers for all fields.";
document.getElementById("totalLeaseCost").textContent = "$–";
document.getElementById("totalBuyCost").textContent = "$–";
}
}