Lease vs Buy Calculator
Settle the lease-versus-buy debate with real numbers. Compare the true net cost of leasing vs buying a car over the lease term.
Lease ads show the monthly payment, not the total cost — and buying builds equity the payment hides. This calculator compares the net cost of both paths over the same period: down payments, monthly payments, remaining loan balance, fees, and what the car is worth at the end.
If you buy
If you lease
Buying builds equity you keep; leasing buys flexibility and a new car every few years. This compares the true net cost over the lease term.
How to use this calculator
- Under 'If you buy': enter the vehicle price, down payment, loan APR, loan term, and what you expect the car to be worth at the end of the comparison period.
- Under 'If you lease': enter the amount due at signing, monthly payment, lease term, and fees.
- Click Calculate.
- Compare the net costs — and check the equity line to see what the buyer keeps.
- Rerun with a pessimistic resale value to stress-test the decision.
The formula
Buy net cost = down payment + loan payments made + remaining loan balance − resale value. Lease net cost = amount due at signing + fees + monthly payment × term. Remaining balance after k payments: B(k) = P(1+r)^k − M × ((1+r)^k − 1)/r.
Worked example
A $30,000 car: buying with $3,000 down at 6% APR over 5 years costs $521.99/month; after 36 months you owe $11,777.49 and the car is worth $18,000 — a net 3-year cost of $15,568.98. Leasing with $2,000 due at signing, $350/month for 36 months, and $1,000 in fees costs $15,600.00. Buying wins by $31.02 — essentially a tie, so decide based on how long you'll keep the car.
Frequently Asked Questions
How is the 'net cost' of buying calculated?
Down payment, plus every loan payment made during the comparison period, plus whatever you still owe on the loan — minus the car's resale value, because selling (or keeping) the car returns that value to you. The difference between resale value and remaining loan balance is your equity.
Why does the resale value matter so much?
It's the biggest swing factor. In the worked example, the buyer ends with $6,222.51 in equity ($18,000 resale minus $11,777.49 owed). Drop the resale estimate to $14,000 and buying costs about $4,000 more — the verdict flips to leasing. Be honest about depreciation: most cars lose roughly half their value in 3–5 years.
What lease costs do people forget?
The drive-off amount beyond the down payment (acquisition fee, first payment, taxes), the disposition fee at turn-in (often $300–$500), excess mileage charges (typically $0.15–$0.30 per mile), and wear-and-tear penalties. Enter acquisition plus disposition fees in the fees field so they're counted.
When does leasing actually win?
When you genuinely want a new car every 2–3 years, drive predictable low mileage, and can write off the lease for business. Serial buyers who trade in every 3 years absorb the steepest depreciation repeatedly — for them, leasing's lower payments can beat buying's equity.
Does this account for maintenance differences?
Not directly. New cars under warranty (leased or bought) cost little to maintain; keeping a bought car beyond the loan term is usually where buying wins big, since payments stop but the car keeps working. This comparison covers the lease term only — the buy-and-hold-for-10-years case favors buying even more.