Car lease vs buy calculator
This calculator compares leasing a car with buying it over the same comparison period. It totals the cash you commit to the lease, estimates the financed purchase payment, and subtracts the expected resale value so the buy side is judged on net cost rather than sticker price.
If lease total cost is lower, leasing is cheaper for the period entered. If buy total cost is lower, ownership is cheaper after considering resale value. The difference is not a full life-of-car forecast; it is the cost gap over the lease-term window you entered.
Decision race
Lease and buy race side by side
Two cost bars compete in real time, including resale value so ownership is not judged by monthly payment alone.
Cost race
Winner board
- Cheaper option
- Buy
- Lease total cost
- $19,000.00
- Buy total cost
- $6,687.46
- Buy monthly payment
- $541.32
- Cost difference
- $12,312.54
A small change in resale value can flip the result. Try a conservative resale value and an optimistic one before using the comparison in a purchase decision.
How does it work?
Lease vs buy formula
- C_L
- Lease cost over the lease term.
- C_B
- Buy cost over the same term after resale value.
- m_B
- Monthly loan payment from the amortizing loan formula.
Compare total lease payments and fees with purchase cash outflow over the same months, then subtract expected resale value.
Method & sources
The calculator compares the total cost of leasing a car with buying it outright or financing it, using the price, term, mileage, and running costs you enter. It does not fetch dealer quotes or residual values from a lender.
Sources
Where this method comes from — use these references to understand the formula, assumptions, and limits.
- Leasing vs. buying a car — U.S. Consumer Financial Protection Bureau, verified 2026-06-10
How we calculate
- The lease term is the comparison period.
- The buy side subtracts expected resale value after that period.
- Fuel, insurance, maintenance, and mileage penalties are not included unless added to fees.
Rounding
Displayed money values are rounded to two decimals and displayed percentages to two decimals. The underlying calculation uses full precision.
What this calculator does
This calculator compares leasing a car with buying it over the same comparison period. It totals the cash you commit to the lease, estimates the financed purchase payment, and subtracts the expected resale value so the buy side is judged on net cost rather than sticker price.
The result is a planning comparison, not a dealer quote. It does not include fuel, insurance, maintenance, mileage penalties, tax credits, or negotiation effects unless you place them into the fee fields yourself. The goal is to make the lease-versus-buy trade-off visible before you focus on monthly payment alone.
How to use it
- Enter the lease monthly payment, upfront payment, term, and any lease fees.
- Enter purchase price, down payment, loan rate, loan term, buying fees, and expected resale value after the lease period.
- Compare the highlighted cheaper option with the total costs underneath.
- Change the expected resale value to see how sensitive ownership is to depreciation.
- Use the same comparison period for both sides; the lease term defines the months being compared.
A worked example
A lease with 450 per month, 2,000 upfront, 800 in fees, and a 36-month term costs 19,000. Buying a 32,000 car with 4,000 down, 6% financing, 1,200 in fees, and an 18,000 resale estimate is compared over the same 36 months. The calculator uses the loan payment for those months and subtracts resale value, which is why depreciation matters so much.
What the result means
If lease total cost is lower, leasing is cheaper for the period entered. If buy total cost is lower, ownership is cheaper after considering resale value. The difference is not a full life-of-car forecast; it is the cost gap over the lease-term window you entered.
Common mistakes
- Comparing a 36-month lease with the full 60-month cost of a purchase instead of the same period.
- Ignoring upfront lease payments or dealer fees.
- Using an unrealistic resale value.
- Treating lower monthly payment as lower total cost without checking the full term.
When it is useful
Useful when choosing between a lease offer and a financed purchase, negotiating with a dealer, or deciding whether a lower monthly payment is worth giving up ownership upside.
FAQ
- Why does the buy side subtract resale value?
- Because after the comparison period you still own an asset. The calculator estimates net ownership cost by subtracting what you expect the car to be worth.
- Does it include maintenance or insurance?
- No. Add comparable costs to the fee fields if they materially differ between the options.
- Which term is used for comparison?
- The lease term defines the comparison window. The buy loan payment is counted only for those months.
- What if the loan term is longer than the lease?
- That is allowed. The calculator uses the monthly loan payment over the lease window and then subtracts the expected resale value.
- Is this a dealer quote?
- No. It is a planning estimate based on the numbers you enter.
Related calculators
- Car loan calculatorEstimate the financing side of buying a car in more detail.
- Loan calculatorCompare a general loan payment with the car financing terms.
- Budget calculatorCheck whether the chosen monthly payment fits your budget.
- APR calculatorSee the true yearly cost of a loan including fees.
- Fuel cost calculatorEstimate what a trip costs in fuel.
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