function calculateLeaseVsBuy() {
// BUYING LOGIC
var buyPrice = parseFloat(document.getElementById('buyPrice').value) || 0;
var buyDown = parseFloat(document.getElementById('buyDown').value) || 0;
var buyRate = (parseFloat(document.getElementById('buyRate').value) || 0) / 100 / 12;
var buyTerm = parseFloat(document.getElementById('buyTerm').value) || 0;
var buyResale = parseFloat(document.getElementById('buyResale').value) || 0;
var loanAmount = buyPrice – buyDown;
var monthlyLoanPayment = 0;
if (buyRate > 0) {
monthlyLoanPayment = loanAmount * (buyRate * Math.pow(1 + buyRate, buyTerm)) / (Math.pow(1 + buyRate, buyTerm) – 1);
} else {
monthlyLoanPayment = loanAmount / buyTerm;
}
var totalLoanInterest = (monthlyLoanPayment * buyTerm) – loanAmount;
// Total cost to buy = (Down payment + Total of Monthly Payments) – Resale Value
var netBuyCost = (buyDown + (monthlyLoanPayment * buyTerm)) – buyResale;
// LEASING LOGIC
var leaseUpfront = parseFloat(document.getElementById('leaseUpfront').value) || 0;
var leaseMonthly = parseFloat(document.getElementById('leaseMonthly').value) || 0;
var leaseTerm = parseFloat(document.getElementById('leaseTerm').value) || 0;
var leaseFee = parseFloat(document.getElementById('leaseFee').value) || 0;
var netLeaseCostTotal = leaseUpfront + (leaseMonthly * leaseTerm) + leaseFee;
// Normalize for the same timeframe (Compare monthly effective cost)
var effectiveMonthlyBuy = netBuyCost / buyTerm;
var effectiveMonthlyLease = netLeaseCostTotal / leaseTerm;
// Display
var resultBox = document.getElementById('result-box');
resultBox.style.display = 'block';
document.getElementById('totalBuyCost').innerHTML = '$' + netBuyCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalLeaseCost').innerHTML = '$' + netLeaseCostTotal.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('buyMonthly').innerHTML = 'Effective: $' + effectiveMonthlyBuy.toFixed(2) + '/mo over ' + buyTerm + 'm';
document.getElementById('leaseMonthlyEff').innerHTML = 'Effective: $' + effectiveMonthlyLease.toFixed(2) + '/mo over ' + leaseTerm + 'm';
var verdictTitle = document.getElementById('verdict-title');
var analysisDesc = document.getElementById('analysis-desc');
if (effectiveMonthlyBuy < effectiveMonthlyLease) {
resultBox.className = 'winner-buy';
verdictTitle.innerHTML = "🏆 Buying is more cost-effective";
analysisDesc.innerHTML = "Based on your inputs, purchasing the vehicle will save you approximately $" + (effectiveMonthlyLease – effectiveMonthlyBuy).toFixed(2) + " per month in the long run. Buying is generally better if you plan to keep the car for more than 4 years and maintain it well to protect its resale value.";
} else {
resultBox.className = 'winner-lease';
verdictTitle.innerHTML = "🏆 Leasing is more cost-effective";
analysisDesc.innerHTML = "Leasing appears to be the cheaper option for this specific timeframe, saving you $" + (effectiveMonthlyBuy – effectiveMonthlyLease).toFixed(2) + " per month. Leasing is ideal if you enjoy driving a new car every 3 years and want to avoid the risks of long-term depreciation and repair costs out of warranty.";
}
}
Understanding Lease vs. Buy: Which is Right for You?
Deciding whether to lease or buy a new car is one of the most significant financial decisions for any household. While both options result in you driving a vehicle, the long-term financial impact differs drastically based on your driving habits, budget, and how long you intend to keep the car.
The Financial Breakdown of Buying
When you finance a car, you are borrowing money to eventually own the asset. The primary advantage is equity. Once the loan is paid off, the vehicle is yours to sell or trade-in. However, you are responsible for the full brunt of depreciation, which typically eats 20% of a car's value in the first year alone.
Pros: No mileage limits, ownership of the asset, lower long-term cost.
Cons: Higher monthly payments, higher down payment, maintenance costs after warranty.
The Financial Breakdown of Leasing
Leasing is essentially "renting" the vehicle for its most productive years. You only pay for the depreciation that occurs during your lease term (plus interest/money factor). This results in lower monthly payments, allowing you to drive a more expensive car for less money upfront.
Pros: Lower monthly payments, always under warranty, latest technology.
Our Lease vs. Buy Calculator compares the Net Cost of Ownership. For buying, it calculates the total loan payments and interest minus the estimated resale value at the end of the term. For leasing, it sums all monthly payments, the down payment (capitalized cost reduction), and the disposition fee. We then normalize these figures into an "effective monthly cost" so you can see exactly which option drains less from your bank account each month.
Case Study: The $35,000 Sedan
Imagine a $35,000 vehicle. If you buy it with a 5-year loan at 5.5% interest and $5,000 down, your monthly payment is roughly $573. After 5 years, if the car is worth $18,000, your total net cost was approximately $21,380. If you lease that same car for $399/month with $2,500 down for 3 years, your cost for those 3 years is $16,864. While the lease payment is lower, the buyer ends up with an $18,000 asset, often making buying the winner for those who hold onto cars for 6+ years.