Compare the total cost of ownership to find the best financial path for your next vehicle.
Buying with a Loan
Leasing
Metric
Buying
Leasing
Monthly Payment
$0
$0
Total Paid Over Term
$0
$0
Equity / Asset Value
$0
$0
Net Cost (Total – Equity)
$0
$0
Should You Lease or Buy Your Next Car?
The decision to lease or buy a car isn't just about the monthly payment; it's about understanding the "Total Cost of Ownership." This calculator compares the out-of-pocket expenses and the long-term equity you build (or don't build) during the vehicle's term.
When Buying Makes Sense
Buying a car is generally the smarter financial move for those who plan to keep their vehicle for more than 5 years. While the monthly payments are higher than a lease, you are building equity. Once the loan is paid off, you own an asset that can be sold or traded in for your next purchase.
Unlimited Mileage: No penalties for long commutes.
Full Ownership: You can modify the car as you wish.
Lower Long-Term Cost: Eventually, you will have no car payment at all.
When Leasing Makes Sense
Leasing is ideal for drivers who want a new car every 2-3 years and prefer lower monthly payments. You are essentially paying for the car's depreciation during the time you drive it, rather than the full value of the vehicle.
Lower Payments: Monthly lease costs are often 30-60% lower than loan payments.
Warranty Coverage: Most leases coincide with the manufacturer's bumper-to-bumper warranty.
Less Sales Tax: In many states, you only pay tax on the monthly payment, not the full purchase price.
Realistic Example Calculation
Imagine a SUV priced at $40,000.
Buying: With $4,000 down and a 6% interest rate for 60 months, your payment is ~$700. After 5 years, you've paid ~$46,000 total but own a car worth $18,000. Your net cost is $28,000.
Leasing: You pay $450/month for 36 months with $3,000 down. Total cost is $19,200. Over 5 years (two consecutive leases), you would spend over $32,000 and own nothing. In this scenario, buying saves you $4,000 over 5 years.
function calculateLeaseVsBuy() {
// Get Buy Inputs
var buyPrice = parseFloat(document.getElementById('buyPrice').value) || 0;
var buyDown = parseFloat(document.getElementById('buyDown').value) || 0;
var buyRate = (parseFloat(document.getElementById('buyRate').value) || 0) / 100 / 12;
var buyTerm = parseFloat(document.getElementById('buyTerm').value) || 1;
var buyResale = parseFloat(document.getElementById('buyResale').value) || 0;
// Get Lease Inputs
var leaseMonthly = parseFloat(document.getElementById('leaseMonthly').value) || 0;
var leaseDown = parseFloat(document.getElementById('leaseDown').value) || 0;
var leaseTerm = parseFloat(document.getElementById('leaseTerm').value) || 1;
var leaseFees = parseFloat(document.getElementById('leaseFees').value) || 0;
// Buying Math (Loan Amortization)
var loanPrincipal = buyPrice – buyDown;
var buyMonthly = 0;
if (buyRate > 0) {
buyMonthly = (loanPrincipal * buyRate * Math.pow(1 + buyRate, buyTerm)) / (Math.pow(1 + buyRate, buyTerm) – 1);
} else {
buyMonthly = loanPrincipal / buyTerm;
}
var buyTotalPaid = (buyMonthly * buyTerm) + buyDown;
var buyNetCost = buyTotalPaid – buyResale;
// Leasing Math
var leaseTotalPaid = (leaseMonthly * leaseTerm) + leaseDown + leaseFees;
var leaseNetCost = leaseTotalPaid; // No equity in a lease
// Adjust for time if terms are different (Monthly Average for comparison)
var buyMonthlyNet = buyNetCost / buyTerm;
var leaseMonthlyNet = leaseNetCost / leaseTerm;
// Display Results
document.getElementById('result-box').style.display = 'block';
document.getElementById('result-box').style.background = '#f4fbf4';
document.getElementById('resBuyMonthly').innerText = '$' + buyMonthly.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resLeaseMonthly').innerText = '$' + leaseMonthly.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resBuyTotal').innerText = '$' + buyTotalPaid.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('resLeaseTotal').innerText = '$' + leaseTotalPaid.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('resBuyEquity').innerText = '$' + buyResale.toLocaleString();
document.getElementById('resLeaseEquity').innerText = '$0';
document.getElementById('resBuyNet').innerText = '$' + buyNetCost.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('resLeaseNet').innerText = '$' + leaseNetCost.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0});
var header = document.getElementById('recommendation-header');
if (buyMonthlyNet < leaseMonthlyNet) {
header.innerHTML = 'Buying is Financially BetterBuying saves you approx. $' + Math.round(leaseMonthlyNet – buyMonthlyNet) + ' per month in long-term value.';
} else {
header.innerHTML = 'Leasing is Financially BetterLeasing saves you approx. $' + Math.round(buyMonthlyNet – leaseMonthlyNet) + ' per month over this term.';
}
}