Deciding between leasing and buying a vehicle is a major financial decision that depends on your driving habits, budget, and long-term goals. While buying offers ownership and equity, leasing typically provides lower monthly payments and the ability to drive a new car every few years.
The Math Behind the Comparison
Our Car Lease vs. Buy Calculator uses industry-standard formulas to help you visualize the cost difference:
Loan Calculation: We use the standard amortization formula to calculate payments based on the net price after your down payment, applying the interest rate over your chosen term.
Lease Calculation: This includes the Depreciation Fee ((Cap Cost – Residual) / Term) and the Rent Charge ((Cap Cost + Residual) * Money Factor). Note that Money Factor is calculated as APR / 2400.
Key Factors to Consider
Feature
Buying (Financing)
Leasing
Ownership
You own the car after the loan.
You return the car after the term.
Monthly Payments
Usually higher.
Usually lower.
Mileage Limits
Unlimited.
Typically 10k-15k per year.
Example Scenario
If you buy a $35,000 SUV with $3,000 down at 5.5% interest for 36 months, your monthly payment would be roughly $966. By the end of 3 years, you've paid about $37,700 total, but you own a vehicle worth $21,000. Your net cost is $16,700. If you lease that same car, your payment might be closer to $520, with a total cost of roughly $21,700 over 3 years, but you have no asset at the end. The "better" deal depends on whether you prefer lower cash flow or long-term equity.
function calculateLeaseBuy() {
var price = parseFloat(document.getElementById('vehiclePrice').value) || 0;
var down = parseFloat(document.getElementById('downPayment').value) || 0;
var rate = parseFloat(document.getElementById('interestRate').value) || 0;
var term = parseFloat(document.getElementById('termMonths').value) || 0;
var residual = parseFloat(document.getElementById('residualValue').value) || 0;
var tax = parseFloat(document.getElementById('salesTax').value) || 0;
if (price <= 0 || term 0) {
buyMonthlyBase = (loanPrincipal * monthlyRate * Math.pow(1 + monthlyRate, term)) / (Math.pow(1 + monthlyRate, term) – 1);
} else {
buyMonthlyBase = loanPrincipal / term;
}
var buyMonthlyTax = buyMonthlyBase * (tax / 100);
var buyMonthlyTotal = buyMonthlyBase + buyMonthlyTax;
var totalBuyPaid = (buyMonthlyTotal * term) + down;
var totalBuyInterest = (buyMonthlyBase * term) – loanPrincipal;
// — LEASE CALCULATIONS —
var capCost = price – down;
var moneyFactor = rate / 2400; // Standard conversion for APR to Money Factor
var depreciationFee = (capCost – residual) / term;
var rentCharge = (capCost + residual) * moneyFactor;
var leaseMonthlyBase = depreciationFee + rentCharge;
var leaseMonthlyTax = leaseMonthlyBase * (tax / 100);
var leaseMonthlyTotal = leaseMonthlyBase + leaseMonthlyTax;
var totalLeasePaid = (leaseMonthlyTotal * term) + down;
var totalRentCharge = rentCharge * term;
// — UPDATE DISPLAY —
document.getElementById('resultsArea').style.display = 'block';
document.getElementById('buyMonthly').innerText = '$' + buyMonthlyTotal.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('buyInterest').innerText = '$' + totalBuyInterest.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('buyTotal').innerText = '$' + totalBuyPaid.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('leaseMonthly').innerText = '$' + leaseMonthlyTotal.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('leaseRent').innerText = '$' + totalRentCharge.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('leaseTotal').innerText = '$' + totalLeasePaid.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
var monthlyDiff = Math.abs(buyMonthlyTotal – leaseMonthlyTotal).toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
var recommendation = "";
if (leaseMonthlyTotal < buyMonthlyTotal) {
recommendation = "Leasing saves you $" + monthlyDiff + " per month in cash flow.";
} else {
recommendation = "Financing is $" + monthlyDiff + " cheaper per month based on these terms.";
}
document.getElementById('comparisonSummary').innerText = recommendation;
// Scroll to results
document.getElementById('resultsArea').scrollIntoView({behavior: 'smooth'});
}