Compare the total cost of leasing vs buying a vehicle over the same period. See monthly payments, total cost, and which option saves you more money.
Leasing and buying are fundamentally different ways to acquire a vehicle. Leasing gives you a new car every few years with lower monthly payments, but you never build equity. Buying costs more monthly but you own the vehicle outright after the loan is paid off.
The right choice depends on your priorities: Do you value lower payments and always driving a new car? Or do you prefer long-term ownership and no payments after the loan ends? The math depends on the specific terms of each option — lease rates, loan rates, residual values, and how long you plan to keep the vehicle.
This calculator compares both scenarios over the same time period, showing total cost for each path. It accounts for lease payments, fees, and any buyout versus loan payments, interest, and the vehicle\'s resale value — giving you a clear financial comparison. Running the numbers yourself eliminates the guesswork and protects you from being steered toward whichever option is more profitable for the dealer.
Lease-vs-buy decisions are often made on gut feeling or monthly payment alone. This calculator models the total cost of each path — including factors most people overlook like residual value, disposition fees, and the vehicle\'s resale value if purchased. The result is a data-driven answer, not a guess. A thorough comparison prevents overspending on a path that feels cheaper month to month but costs more overall.
Lease Total Cost = Down Payment + (Monthly Payment × Months) + Disposition Fee. Buy Total Cost = Down Payment + (Loan Payment × Months) + Interest − Resale Value at end of period. Net Advantage = Lease Cost − Buy Cost (positive means buying is cheaper).
Result: Lease: $16,764 — Buy: $15,548 — Buying saves $1,216
The 36-month lease costs $2,000 down + $14,364 in payments + $400 disposition fee = $16,764. Buying: $5,000 down; the $35,000 loan at 6% for 60 months costs $40,599 in payments. Total outlay is $45,599, minus $22,000 resale value = $23,599 over 60 months, or $14,159 pro-rated to 36 months. Buying edges out leasing.
Monthly payment is a misleading metric for this decision. Leasing has lower payments but zero equity at the end. Buying has higher payments but you own a depreciating asset. The real comparison is total out-of-pocket cost over the same time period, accounting for the vehicle's residual value if you buy.
Leasing can be the better financial choice when: the vehicle depreciates heavily (you avoid the worst years of depreciation), you need a vehicle for business and can deduct lease payments, or the money factor is below the prevailing loan rate. It also wins for people who prioritize always having warranty coverage.
Buying wins when you plan to keep the vehicle for many years beyond the loan payoff, when you drive high mileage (no penalty), when the vehicle holds value well, or when loan rates are competitive. The longer you keep a purchased vehicle, the more buying's advantage grows.
It depends on the specific terms and how long you keep the vehicle. Leasing is often cheaper in the short term (lower monthly payments), but buying is cheaper long-term because you own the vehicle and can drive it payment-free for years after the loan is paid off. This calculator helps you compare both for your specific situation.
Leasing can include acquisition fees ($500–$1,000), disposition fees ($300–$500), excess mileage charges ($0.15–$0.30 per mile), and wear-and-tear charges. You also lose the flexibility to sell the vehicle if your needs change.
Residual value is the estimated worth of the vehicle at the end of the lease term. It determines your lease payment — a higher residual means lower payments because you are only paying for the depreciation during the lease period. It is also the price to buy the vehicle at lease end if you choose.
Yes. You can negotiate the selling price (capitalized cost), which directly reduces your payment. You can also negotiate the money factor (interest rate) and sometimes the residual value. The down payment and term are also flexible. Never accept the first offer.
You have three options: return the vehicle and walk away (paying any disposition or excess charges), buy the vehicle at the predetermined residual value, or trade it in for a new lease. If the vehicle is worth more than the residual, buying it can be a good deal.
Leasing suits people who want a new vehicle every 2–3 years, drive fewer than 12,000–15,000 miles annually, prefer lower monthly payments, and do not want to deal with selling a used car. Business owners may also benefit from lease-specific tax deductions.