FinanceCalcs
Car Lease vs. Buy Calculator
Compare the true total cost of leasing vs. buying a car — including loan payments, resale value, lease fees, and mileage overages — and find out which option makes more financial sense for you.
Works for any vehicle price and lease terms — compare side by side over the same time period.
Car Lease vs. Buy Calculator
- Buying Cost
- Leasing Cost
"The true cost of a car isn't the sticker price — it's everything you pay over the life of ownership."
— Unknown
Car lease vs. buy explained
When you buy a car, you pay for the full vehicle value — either in cash or through a loan. Once the loan is paid off, you own the car outright and can sell or trade it in at any time. Buying builds equity in the vehicle over time.
When you lease, you pay only for the portion of the vehicle's value you use during the lease term — which is why monthly lease payments are typically lower than loan payments. At the end of the lease you return the car, own nothing, and have no asset to sell.
This calculator compares the true out-of-pocket cost of each path over the same period — factoring in the car's estimated resale value for buyers and all upfront fees, monthly payments, and end-of-lease charges for lessees — so you can see which option actually costs less.
lightbulb Example Lease vs. Buy Scenario
Suppose a car has an MSRP of $35,000. Buying with a $3,000 down payment at 6.5% APR over 60 months results in payments of about $620/month. After 36 months, the car may have a resale value of around $21,000, making the net cost of buying roughly $10,500 over that period.
A lease on the same car might offer $399/month for 36 months with $2,500 due at signing and a $400 disposition fee — a total out-of-pocket of about $17,264.
In this scenario, buying comes out ahead on net cost — but leasing offers lower monthly payments and the flexibility to drive a new car every few years. Use the calculator above to compare your specific numbers.
Many people use a lease vs. buy calculator to evaluate a car deal, understand the true cost of leasing, and decide which option fits their financial situation and driving habits.
Car Lease vs. Buy FAQs
Is it better to lease or buy a car?
It depends on your priorities. Buying is typically better financially over the long term — you build equity and eventually own the car outright. Leasing offers lower monthly payments and the flexibility to drive a new vehicle every few years, but you never own anything and pay continuously as long as you lease.
Why are lease payments lower than loan payments?
Lease payments only cover the portion of the vehicle's value you use during the lease term — essentially the depreciation — plus a financing charge. Loan payments cover the full purchase price. That difference is why monthly lease payments are typically lower for the same vehicle.
What happens at the end of a lease?
At the end of a lease you can return the vehicle and walk away, buy it at the predetermined residual value, or lease a new vehicle. If you return it, you may owe a disposition fee and any charges for excess mileage or wear and tear.
What is residual value?
Residual value is the estimated worth of the vehicle at the end of the lease term, expressed as a percentage of MSRP. It affects both lease payments and the buyout price if you want to keep the car. Higher residual values generally mean lower monthly lease payments.
Key terminology
Residual Value
The estimated value of the vehicle at the end of the lease term, expressed as a percentage of MSRP. Higher residuals mean lower lease payments — and a higher buyout price if you choose to purchase the car at lease end.
Money Factor
The lease equivalent of an interest rate. Multiply by 2,400 to convert to an approximate APR — for example, a money factor of 0.00125 equals roughly 3% APR.
Due at Signing
The upfront amount paid when taking delivery of a leased vehicle — typically includes the first month's payment, security deposit, acquisition fee, and any capitalized cost reduction.
Disposition Fee
A fee charged by the lessor when you return the vehicle at lease end without purchasing it or leasing another vehicle from the same brand. Typically $300–$500.
Mileage Overage
Leases include an annual mileage allowance — typically 10,000–15,000 miles. Exceeding it results in a per-mile charge, usually $0.15–$0.30 per mile, billed at lease end.
Disclaimer: All calculators on this site are provided for informational and educational purposes only. Results are estimates based on the inputs you provide and mathematical formulas — they do not account for taxes, fees, inflation, risk, or other real-world factors that may affect financial outcomes. Past performance does not guarantee future results. Nothing on this site constitutes financial, investment, legal, or tax advice. Always consult a qualified professional before making financial decisions.
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