Car Lease vs. Buy Calculator
Compare the total costs of financing a vehicle versus leasing to find the best deal.
Comparison Result
Financing (Monthly)
$0
Lease (Monthly)
$0
Total Cost to Finance (Full Term): $0
Total Cost to Lease (Full Term): $0
Should You Lease or Buy Your Next Car?
Deciding between leasing and buying a car is one of the most significant financial choices for many households. Each option offers distinct advantages depending on your driving habits, budget, and long-term goals.
The Case for Buying (Financing)
When you buy a car, you own the asset once the loan is paid off. This is generally the most cost-effective path for people who keep their vehicles for more than five years. You have the freedom to drive unlimited miles without penalty and can customize the vehicle as you see fit.
- Equity: You build ownership value over time.
- No Mileage Limits: Ideal for long commuters or road trippers.
- Lower Long-Term Cost: Once the loan is paid, you only pay for maintenance and insurance.
The Case for Leasing
Leasing is essentially "renting" the vehicle for a fixed period (usually 36 months). It is perfect for those who enjoy driving the latest models with the newest safety technology and want lower monthly payments.
- Lower Payments: Monthly lease costs are typically lower than loan payments.
- Warranty Coverage: Most lease terms align with the manufacturer's warranty.
- Flexibility: Easily upgrade to a new car every 2-3 years without the hassle of selling.
Example Calculation
Imagine a car priced at $30,000. If you put $3,000 down on a 60-month loan at 5% interest, your monthly payment would be roughly $509. Over 5 years, you pay $33,540 total but own a car worth maybe $12,000. If you lease that same car for $350 a month for 36 months with $3,000 down, your total cost for 3 years is $15,600, but you have no asset at the end.