Leasing vs Buying Calculator
Compare the total cost of leasing versus buying a vehicle.
Estimated resale value when you'd return the lease
Results update as you type.
This calculator is for illustrative purposes only. Actual rates, fees and terms vary by lender. Consult a qualified financial adviser before making borrowing decisions.
How it works
A leasing vs buying calculator tackles one of the most common personal finance questions for vehicle shoppers, and the honest answer is that it depends heavily on individual circumstances, usage patterns, and financial goals. Leasing offers lower monthly payments because you finance only the depreciation during the lease term, not its full price. This frees up monthly cash flow and lets you drive a newer car than you might otherwise afford. However, at lease end you own nothing — you must lease or buy again, and lease payments are perpetual if you continuously lease. Buying costs more per month but builds equity. As the loan pays down and the car continues to depreciate more slowly in later years, owning the vehicle outright eventually becomes dramatically cheaper per month. Drivers who exceed 10,000–15,000 miles per year often find leasing expensive due to mileage overage charges. Those who would be charged for wear-and-tear on a lease are better served buying. Frequent new-car buyers who trade in every three years anyway may find leasing comparable to repeatedly buying and selling, especially when subsidized leases push the implicit rate below market. The leasing vs buying calculator weighs the key factors: your annual mileage, how long you typically keep vehicles, whether you modify or use vehicles heavily, and whether the lease rate is competitive.
Total Loan Cost = Down Payment + (Monthly Payment × Months); Net Buying = Total Loan Cost − Residual Value; Total Lease = Monthly Lease × Lease Months
Total buying cost sums the down payment plus all monthly loan payments over the full term. Net buying cost subtracts the estimated vehicle value at the end of the comparison period (what you could sell it for). Total lease cost is monthly payment times lease months. The comparison normalizes the two options over the same time horizon: if you repeatedly lease, the cost continues every cycle; if you buy and keep the car, the loan ends and costs drop.
Source:Standard total cost of ownership comparison
We review all our tools from time to time to ensure accuracy.
Worked example
How to use this calculator
- 1
Enter your values
Enter vehicle price, monthly loan payment and monthly lease payment.
- 2
Adjust the options
Adjust down payment (if buying), loan term, lease term, vehicle value at end of loan term and annual depreciation rate if they apply — sensible defaults are already set.
- 3
Read your result
Net buying cost (after resale) updates instantly as you type — no button to press.
Frequently asked questions
Is leasing or buying cheaper in the long run?
Buying and keeping a vehicle for 7–10 years is almost always cheaper in the long run because you eliminate payments entirely once the loan is paid and avoid perpetual lease cycles. A 60-month loan at $600/month means zero payment starting in month 61; a lessee who chains 36-month leases pays indefinitely. Studies from Consumer Reports and Edmunds consistently show that buying a 3-year-old certified pre-owned vehicle and keeping it for a decade is the lowest total cost of ownership strategy. Leasing can be competitive over shorter horizons, especially when manufacturers subsidize lease rates to move inventory.
What are mileage overage charges in a lease?
Standard lease agreements include a mileage allowance of 10,000, 12,000, or 15,000 miles per year. Driving beyond the allowance triggers per-mile charges at lease end, typically $0.15–$0.30 per mile. For a driver who covers 20,000 miles per year on a 12,000-mile allowance over 36 months, the overage would be 24,000 miles — a charge of $3,600–$7,200 at return. If you anticipate exceeding the standard mileage, either negotiate a higher annual allowance upfront (at a higher payment) or choose buying as the less penalizing option.
Can I buy a car at the end of the lease?
Yes — most leases include a purchase option at lease end for the residual value stated in the original contract. If the car is worth more than the residual (it depreciated less than expected), buying at residual is good value. If the car is worth less, you can return it and walk away — that downside risk transfers to the leasing company. Whether buying at lease end makes financial sense depends on whether the residual price is competitive with what you could buy an equivalent used vehicle for in the open market at that time.
What is a money factor in a lease?
The money factor is the lease equivalent of an interest rate, expressed as a very small decimal (e.g., 0.00150). Multiply by 2,400 to convert to an approximate APR — a money factor of 0.00150 is roughly equivalent to a 3.6% APR. Money factors are set by the manufacturer's captive finance division and reflect current interest rates plus any promotional subsidies. Always ask the dealer for the money factor and convert it; a high money factor can make a seemingly attractive payment expensive in total interest charges.
Does leasing affect my credit score differently than buying?
Both lease and loan obligations appear on your credit report as installment debt and affect your score similarly — payment history is the dominant factor in both cases. On-time lease payments build credit history; missed payments hurt it. One difference: since leases tend to be shorter, a successfully completed lease adds a closed account to your history sooner, which can slightly benefit average account age over time. Neither leasing nor buying is meaningfully superior for credit purposes; both serve primarily as tools for transportation decisions, not credit optimization.