Leasing and buying both get you a vehicle, but the costs and trade-offs differ. Leasing typically means lower monthly payments and a new car every few years. Buying builds ownership and eventually ends your payment. This calculator compares out-of-pocket costs over the lease period.
How to use this calculator
- Enter the vehicle price and lease payment with lease term in months.
- Enter your down payment and loan rate with loan term in years.
- Review lease cost, buy cost over the same period, and the difference.
- Read the pros, cons, and recommendation to guide your decision.
Formula
Lease cost equals down payment plus lease payment times lease term months. Buy cost equals down payment plus loan payment times the same number of months. The difference shows which option costs less over the comparison period.
Example
On a $35,000 vehicle with a $450/month lease for 36 months and a $3,000 down payment, leasing costs $19,200. Buying with a 6.5% loan over 5 years costs about $24,132 over the same 36 months — leasing appears cheaper in out-of-pocket terms, though buying builds equity.
Frequently asked questions
- Is leasing always cheaper than buying?
- Not always. Leasing often has lower monthly payments, but buying can cost less long term if you keep the vehicle after the loan is paid off. This calculator compares the lease period only.
- Does this include resale value?
- No. Resale value and equity are not modeled. Buying may look more expensive upfront but you retain the vehicle's value at the end of the loan.
- What about mileage limits on leases?
- Lease mileage overages and wear-and-tear fees are not included. High-mileage drivers often benefit more from buying.