Deciding between leasing and buying a car is more than just a monthly payment comparison; it is a long-term financial decision. This calculator helps you compare the Total Cost of Ownership between financing a vehicle and leasing one over the same duration.
Understanding the Calculations
When you Buy, you are paying for the entire value of the vehicle plus interest. However, at the end of the loan term, you own an asset. To find the "Net Cost," we subtract the projected resale value from the total amount paid (down payment + all monthly payments).
When you Lease, you are essentially paying for the car's depreciation during the time you drive it. The total cost includes the monthly payments, the "due at signing" amount, and the disposition fee (charged when you return the car), minus any refundable security deposits.
Example: Leasing vs. Buying a $35,000 Sedan
Suppose you are looking at a $35,000 car for a 36-month period:
Lease: $3,000 down, $450/month for 36 months, and a $350 fee. Total: $19,550.
Buy: $5,000 down, 5.5% interest for 60 months. After 36 months, you've paid roughly $21,000 in payments. If the car is worth $20,000 and you pay off the remaining loan balance, your net cost might be significantly different.
Pros and Cons
Leasing
Pros: Lower monthly payments, drive a new car every 3 years, car is always under warranty.
Cons: No equity, mileage limits, potential wear-and-tear charges.
Buying
Pros: Asset ownership, no mileage restrictions, cheaper in the long run if you keep the car for 5+ years.
function calculateLeaseVsBuy() {
// 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;
var buyTerm = parseFloat(document.getElementById("buyTerm").value) || 0;
var resaleValue = parseFloat(document.getElementById("resaleValue").value) || 0;
// 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) || 0;
var leaseDeposit = parseFloat(document.getElementById("leaseDeposit").value) || 0;
var leaseFee = parseFloat(document.getElementById("leaseFee").value) || 0;
// Calculation Buy: Total Loan Payment Cost
var principal = buyPrice – buyDown;
var monthlyRate = (buyRate / 100) / 12;
var totalBuyPayments = 0;
if (monthlyRate === 0) {
totalBuyPayments = principal;
} else {
var monthlyPaymentBuy = principal * (monthlyRate * Math.pow(1 + monthlyRate, buyTerm)) / (Math.pow(1 + monthlyRate, buyTerm) – 1);
// We only compare the cost over the LEASE TERM to be fair
// But the prompt asks for "Total Net Cost", so we look at the whole loan minus resale
totalBuyPayments = (monthlyPaymentBuy * buyTerm);
}
var netBuyCost = totalBuyPayments + buyDown – resaleValue;
// Calculation Lease: Total Cost
var totalLeaseCost = (leaseMonthly * leaseTerm) + leaseDown + leaseFee – leaseDeposit;
// Normalize comparison: Lease vs Buy over the LEASE term period
// If user buys and keeps car for 5 years but leases for 3, the comparison is tricky.
// We provide the Net Cost of the full transaction for clarity.
// Display
document.getElementById("results-area").style.display = "block";
document.getElementById("total-buy-display").innerText = "$" + netBuyCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("total-lease-display").innerText = "$" + totalLeaseCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
var recommendation = document.getElementById("recommendation-text");
if (netBuyCost < totalLeaseCost) {
var savings = totalLeaseCost – netBuyCost;
recommendation.innerText = "Buying is cheaper by $" + savings.toLocaleString(undefined, {maximumFractionDigits: 0}) + "!";
recommendation.style.color = "#1a73e8";
} else {
var savings = netBuyCost – totalLeaseCost;
recommendation.innerText = "Leasing is cheaper by $" + savings.toLocaleString(undefined, {maximumFractionDigits: 0}) + "!";
recommendation.style.color = "#34a853";
}
}