Lease vs Buy Car Calculator
Compare the total cost of leasing a car with financing and owning it over the same period.
About the Lease vs Buy Car Calculator
Leasing usually has lower monthly payments but you own nothing at the end. Buying costs more each month but you keep the car's remaining value (equity = resale value − loan balance). Compare net cost over the lease term; owning longer usually favours buying because the car keeps working after the loan is paid.
The formula
Buy net = down + payments − (resale value − loan balance); lease net = due at signing + payments
Worked example
Example: Buying costs less by = $438
- Inputs: Car price: $44,000; Down payment: $4,400; Loan APR: 7.2%; Loan term: 66 months; Lease monthly payment: $500; Lease term: 40 months; Due at lease signing: $3,300; Car value after the lease term: 64 % of price.
- Formula: Buy net = down + payments − (resale value − loan balance); lease net = due at signing + payments
- Result: Buying costs less by = $438
Things to keep in mind
- Ignores mileage overage charges, wear fees and differences in insurance and maintenance.
Questions people ask
When does leasing make sense?
If you want a new car every few years, drive predictable miles, or can deduct it as a business expense.
What about excess mileage?
Leases often charge 15–30¢ per mile over the allowance.