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Car Lease vs. Buy Calculator

function calculateLeaseVsBuy() { var price = parseFloat(document.getElementById('vehiclePrice').value); var down = parseFloat(document.getElementById('downPayment').value); var loanRate = parseFloat(document.getElementById('loanRate').value) / 100 / 12; var loanTerm = parseFloat(document.getElementById('loanTerm').value); var leaseMonthly = parseFloat(document.getElementById('leaseMonthly').value); var leaseTerm = parseFloat(document.getElementById('leaseTerm').value); var futureValue = parseFloat(document.getElementById('futureValue').value); var tax = parseFloat(document.getElementById('salesTax').value) / 100; if (isNaN(price) || isNaN(down) || isNaN(loanRate) || isNaN(leaseMonthly)) { alert("Please fill in all fields with valid numbers."); return; } // Buying Calculation var principal = price – down; var buyMonthly = (principal * loanRate * Math.pow(1 + loanRate, loanTerm)) / (Math.pow(1 + loanRate, loanTerm) – 1); var taxTotal = price * tax; // Cost over 36 months (standard lease term comparison) var buyCost3Years = down + (buyMonthly * 36) + taxTotal – (futureValue * 0.9); // 0.9 adjust for selling fees/hassle // Leasing Calculation var leaseTotalCost = down + (leaseMonthly * leaseTerm); var leaseEffectiveMonthly = leaseTotalCost / leaseTerm; document.getElementById('buyMonthlyOut').innerText = "$" + buyMonthly.toFixed(2); document.getElementById('buyTotalOut').innerText = "$" + buyCost3Years.toFixed(2); document.getElementById('leaseMonthlyOut').innerText = "$" + leaseMonthly.toFixed(2); document.getElementById('leaseTotalOut').innerText = "$" + leaseTotalCost.toFixed(2); var verdictDiv = document.getElementById('verdict'); if (buyCost3Years < leaseTotalCost) { verdictDiv.innerText = "Buying is financially better by $" + (leaseTotalCost – buyCost3Years).toFixed(2) + " over " + leaseTerm + " months."; verdictDiv.style.backgroundColor = "#d4edda"; verdictDiv.style.color = "#155724"; } else { verdictDiv.innerText = "Leasing is financially better by $" + (buyCost3Years – leaseTotalCost).toFixed(2) + " over " + leaseTerm + " months."; verdictDiv.style.backgroundColor = "#fff3cd"; verdictDiv.style.color = "#856404"; } document.getElementById('results').style.display = 'block'; }

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Should You Lease or Buy Your Next Car?

Deciding between leasing and buying a vehicle is more than just a monthly payment comparison; it's a lifestyle and financial strategy choice. This Car Lease vs. Buy Calculator helps you visualize the true cost of ownership over a standard 3-year period.

The Financial Mechanics of Buying

When you buy a car, you are financing the entire purchase price of the vehicle plus taxes and fees. Every payment builds equity. By the end of the loan term, you own an asset that, while depreciated, still carries significant market value. The primary "cost" of buying is the depreciation plus the interest paid on the loan.

The Financial Mechanics of Leasing

Leasing is essentially "renting" the vehicle's most expensive years. Your payments cover the difference between the car's current price and its projected residual value at the end of the lease, plus a "money factor" (interest). You are only paying for the portion of the car's life that you actually use.

Comparison Example

Consider a $35,000 SUV:

• Buying: With $5,000 down and a 5.5% interest rate over 60 months, your payment is roughly $573. After 3 years, you still owe money on the loan, but the car is worth approximately $21,000. Your net cost (payments + down payment – equity) is your true expense.
• Leasing: With $5,000 down and a monthly payment of $450 for 36 months, your total out-of-pocket is $21,200. At the end of the term, you simply return the car.

Pros and Cons

Buying

• No mileage restrictions.
• Full ownership at the end of the loan.
• Can modify the vehicle.
• Lower long-term cost.

Leasing

• Lower monthly payments.
• Always driving a new car under warranty.
• No trade-in or resale hassles.
• Predictable maintenance costs.

Which One Should You Choose?

If you drive more than 15,000 miles per year or tend to keep your cars for 7 to 10 years, buying is almost always the superior financial choice. However, if you enjoy the latest technology every few years and want to keep your monthly cash flow flexible, leasing provides a convenient, lower-payment alternative.