Car Lease vs. Buy Calculator
Total cost of buying with a loan versus leasing a car over one period: down payment, loan, tax, upkeep and resale value against lease payments and fees. How it works
Use the Car Lease vs. Buy Calculator
About the Car Lease vs. Buy Calculator
With the default inputs, buying a $35,000 car on a 60-month loan costs $32,832.09 over 60 months, and leasing at $450 a month, twice, costs $37,800.00, so buying costs $4,967.91 less. The lease vs buy calculator adds each option’s down payment, payments, fees, tax and maintenance, subtracts the resale value when you buy, and compares the two totals over one period. The same yearly maintenance goes into both totals, so it raises both but never changes which one is cheaper.
Buy or lease at different resale values (other inputs at the defaults)
| Resale value | Buying total | Leasing total | Lower cost | By |
|---|---|---|---|---|
| $8,000.00 | $39,832.09 | $37,800.00 | Leasing | $2,032.09 |
| $10,000.00 | $37,832.09 | $37,800.00 | Leasing | $32.09 |
| $12,500.00 | $35,332.09 | $37,800.00 | Buying | $2,467.91 |
| $15,000.00 | $32,832.09 | $37,800.00 | Buying | $4,967.91 |
| $17,500.00 | $30,332.09 | $37,800.00 | Buying | $7,467.91 |
| $20,000.00 | $27,832.09 | $37,800.00 | Buying | $9,967.91 |
Defaults: $35,000 price, $5,000 down, 5.5% APR, 60-month loan, 7% sales tax, $1,200 a year of maintenance, a $450 lease for 36 months with $2,000 down and a $400 fee, compared over 60 months. The $15,000 row is the default.
Buy or lease at different lease payments (other inputs at the defaults)
| Lease payment | Buying total | Leasing total | Lower cost | By |
|---|---|---|---|---|
| $350.00 | $32,832.09 | $31,800.00 | Leasing | $1,032.09 |
| $400.00 | $32,832.09 | $34,800.00 | Buying | $1,967.91 |
| $450.00 | $32,832.09 | $37,800.00 | Buying | $4,967.91 |
| $500.00 | $32,832.09 | $40,800.00 | Buying | $7,967.91 |
| $550.00 | $32,832.09 | $43,800.00 | Buying | $10,967.91 |
| $600.00 | $32,832.09 | $46,800.00 | Buying | $13,967.91 |
Each $50 of monthly lease payment adds $3,000 over the 60 months. The $450 row is the default.
How to use this tool
- Enter the purchase price, down payment, APR, loan term, sales tax, yearly maintenance and the resale value you expect at the end of the comparison period.
- Enter the lease payment, lease term, amount due at signing and disposition fee, or work the payment out from a quote (cap cost, MSRP, residual and money factor). Optional fields add a trade-in, a rebate, other lease fees and the mileage charge.
- Set the comparison period (it follows the loan term until you type one) and read the verdict and the cost breakdown.
Frequently asked questions
- Is it cheaper to lease or buy a car?
- It depends on the inputs. With the defaults, buying costs $4,967.91 less over 60 months. The FTC notes that lease payments are usually lower than loan payments for the same car, and here they are ($450 against $573.03), but the lease runs twice and pays a signing amount and fee each time, while buying ends with a car worth the resale value you enter.
- At what resale value does buying beat leasing?
- With the default inputs buying and leasing cost the same at a resale value of $10,032.09. Above that, buying costs less, and at $10,000 leasing costs $32.09 less. For your own estimate, look up asking prices of used cars of the same model, trim and mileage at the age yours will be when the comparison period ends.
- What if my comparison period is shorter than the loan?
- The loan still owed at the end is added to the buying cost. At 36 months with the defaults that balance is $12,995.27, buying totals $29,674.52 and one 36-month lease totals $22,200.00, so leasing costs $7,474.52 less. Set the resale value to what the car should be worth at that date, because the field is not adjusted for you.
- Why does the lease count twice?
- The 36-month lease is repeated back to back to cover the 60-month period: ceil(60 ÷ 36) = 2 leases, each with its own $2,000 down payment and $400 fee. A 60-month comparison with a 60-month lease term counts one.
- What is not included in the comparison?
- Sales tax is charged on the purchase only, and some places also tax lease payments, which this tool does not add. Insurance, excess wear charges and early termination charges are not included, and the totals are not discounted for the time value of money. Mileage charges count only when you enter your miles, the allowance and the charge per mile: 15,000 miles a year on a 12,000 allowance at $0.25 adds $3,750 over 60 months.
- How do I turn a money factor into a lease payment?
- Tick “Work out the monthly payment from a lease quote”. The payment is (cap cost − residual) ÷ term for depreciation plus (cap cost + residual) × money factor for finance. A $30,000 cap cost on a $35,000 MSRP with a 60% residual ($21,000), a 0.00125 money factor and 36 months is $250.00 + $63.75 = $313.75 a month before tax. The money factor × 2,400, 3% here, is the rough APR it stands for.
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