Lease vs. Buy Calculator
Compare the total cost of leasing against financing the same vehicle.
Your Details
How It Works
- Enter the lease payment and term you're considering.
- Enter the loan payment, term, and expected resale value if buying.
- Press Calculate to compare net costs.
Formula Used
Good to Know
- • Leasing usually has lower monthly payments but no ownership at the end.
- • Buying builds equity you can sell or trade in.
Important Notes
- • Leases often include mileage limits and wear-and-tear fees not counted here.
- • Resale value is an estimate and can vary with market conditions.
What Leasing Trades Away
A lease payment is typically lower than a comparable loan payment because you're only paying for the vehicle's depreciation during the lease term, not its full value. In exchange, you own nothing at the end — no resale value, no equity, and often mileage limits or excess wear fees if the car isn't returned in expected condition.
When Leasing Can Still Make Sense
Despite usually costing more over the long run, leasing can suit people who prefer driving a newer car every few years, want predictable costs with fewer surprise repairs (since leases often stay within warranty), or need a vehicle for business use with specific tax treatment. The right choice depends on priorities beyond just the net dollar comparison above.
Terms That Come Up Often
- Residual value — what a leased or financed vehicle is worth at the end of the term.
- Money factor — the lease equivalent of an interest rate, often expressed as a small decimal.
An Illustration: 36-Month Lease vs. 60-Month Loan
Buy: $520/mo × 60 = $31,200 total, minus $9,000 resale value = $22,200 net
Buying costs about $8,500 more in this scenario but ends with an owned asset worth roughly $9,000 — meaning the two options land close in true cost, with buying edging ahead once resale value is credited back.
Term Length Comparison Table
| Option | Ends With |
|---|---|
| 36-mo Lease | No vehicle |
| 60-mo Loan | Owned vehicle + resale value |
Avoidable Errors Comparing Lease vs. Buy
- Ignoring mileage limits on leases — excess mileage fees can add up significantly.
- Not accounting for resale value when buying — buying's true cost is lower once resale value is credited.