Lease vs. Buy Calculator
Compare the long-term value of leasing versus financing
Recommendation over 36 months
Financing is Better
by $8,998 in net costFinance (Buy)
Monthly Payment $1,208
Total Out-of-Pocket $48,482
Estimated Equity $27,000
Net Cost $21,482
Lease
Monthly Payment $680
Total Out-of-Pocket $30,480
End-of-Lease Equity $0
Net Cost $30,480
Vehicle Price $45,000
Down Payment $5,000
Resale Value (Est.) $27,000
Lease vs. Buy: Which is right for you?
Choosing between leasing and buying depends on your driving habits, financial goals, and how often you like a new car.
How Leasing Works
When you lease, you are only paying for the vehicle's depreciation during the lease term, plus a finance charge.
- Lower monthly payments compared to buying.
- Always drive a newer car under warranty.
- Mileage limits usually apply (e.g., 10k or 12k miles/year).
- You don't own the car at the end of the term.
How Buying Works
When you finance a purchase, your payments go toward the full value of the vehicle plus interest.
- You build equity as you pay down the loan.
- Once the loan is paid off, you own the vehicle outright.
- No mileage restrictions or wear-and-tear penalties.
- Higher monthly payments but lower long-term cost if you keep the car.
The Math Explained
We compare the 'Net Cost' over the same time period. For buying, we subtract the car's estimated future value (equity) from your total payments.
- Money Factor: Essentially the interest rate for a lease.
- Residual Value: The car's estimated value at the end of the lease.
- Acquisition Fees: Upfront costs usually required for leases.