Lease vs Buy Calculator
Leasing against financing the same car, measured as cash paid less whatever you still own at the end — because comparing the two monthly payments always favours the lease.
The address carries whatever you changed, so anyone opening it sees these numbers. Nothing is saved on our side.
Leasing costs less over this period
$7,978
Over 36 months, measured as cash paid less whatever you still own at the end. Leasing costs $19,595 against $27,573 net to buy — but at the end of a lease you own nothing.
- $19,595
- Signing, payments and disposition
- $31,730
- $4,157
- $22,000 value less $17,843 owed
- $27,573
- Cash paid less equity
- $798
- Against the lease payment
- $17,843
The two side by side
Comparing the monthly payments alone always favours the lease, because a lease payment covers depreciation while a loan payment buys the whole car. This compares cash out, less what you still hold.
- Lease: due at signing
- $3,000
- Lease: payments
- $16,200
- Lease: disposition fee
- $395
- Lease total
- $19,595
- Buy: cash paid
- $31,730
- Buy: car is worth
- $22,000
- Buy: still owed
- $17,843
- Buy net cost
- $27,573
What this cannot price
Every one of these can change the answer, and none of them is a number this calculator can know for you.
Mileage limits
A lease caps your miles and charges for every one over, often 20–30 cents. Drive far and the lease gets expensive at the end rather than the beginning.
Wear and tear
Returned leases are inspected. Kerbed wheels and worn seats become a bill; on a car you own they become someone else's problem at resale.
The resale assumption
Buying only wins if the car is worth what you assumed. Models depreciate very differently, and the slider above is doing more work than any other input.
Insurance and gap cover
Leases usually require higher coverage limits, and gap insurance is often mandatory.
What happens next
Buying wins over a long enough horizon because the payments stop and the car does not. A lease returns you to the start every three years.
How this calculator works
Both sides over the same period, both measured the same way.
lease = signing + payments + disposition
buy = cash paid − (resale value − balance owed)
The subtraction on the buying side is the whole point. Money that turned into a car you still own is not the same as money that is gone, and a comparison that ignores it is not a comparison.
If the loan is shorter than the comparison period, the payments stop when it is repaid — which is exactly why the buyer’s cost eventually stops rising and the lessee’s does not.
What is assumed
- The lease payment you enter is the real one, including tax where your state charges it monthly.
- Buying incurs sales tax on the full price up front, which is financed.
- You stay within the mileage allowance and return the car in acceptable condition.
- The resale value is what you say it is. It is an assumption, not a fact.
A worked example
A $40,000 car over 36 months. Leasing at $450 a month with $3,000 due at signing and a $395 disposition fee, against financing at 6.9% over 60 months with $3,000 down, 7% sales tax and $600 of fees, assuming 55% resale.
| Lease: due at signing | Paid on day one |
|---|---|
| Lease: 36 payments | $450 × 36 |
| Lease: disposition fee | Charged on return |
| Buy: cash paid | $3,000 down plus 36 × $798.06 |
| Buy: car is worth | 55% of $40,000 |
| Buy: still owed | 24 payments left on a 60-month loan |
| Leasing costs less by | $19,595 against $27,573 net |
That is the honest answer over three years, and it is not the one most people expect. The buyer has paid $31,730 and owns $4,157 of equity, because two years of payments remain on a car that has already lost 45% of its value.
Extend the comparison and it reverses. At 60 months the loan is repaid and the buyer’s cash cost stops rising, while the lease keeps billing every month. By 84 months buying is ahead — not because the arithmetic changed, but because the payments ended and the car did not.
Questions people ask
Because they buy different things. A lease payment covers the car's depreciation over the term plus interest; a loan payment buys the entire car. The lease payment is smaller on essentially every vehicle, which makes the comparison useless — it tells you which is cheaper this month, not which is cheaper.
Not automatically, and the calculator will tell you so when it is not. Over the length of a typical lease, leasing often does cost less cash than financing the same car, because the buyer is paying down an asset they have not finished paying for. Buying wins over a long enough horizon, for a specific reason: the loan ends and the car does not, so the buyer's cost plateaus while the lease keeps billing.
It is what the leasing company expects the car to be worth at the end, and it sets your payment: you are financing the difference between the price and the residual. A car with a high residual leases cheaply. That same slow depreciation is what makes it a good car to buy, which is why the resale slider moves this answer more than any other input on the page.
Mileage limits and the per-mile charge for exceeding them, wear-and-tear charges at return, the higher insurance limits most leases require, gap coverage, and any business tax treatment. Each of these can move the answer by thousands, and none of them is a number this calculator can know for you — the page lists them rather than quietly assuming them away.
Then the arithmetic matters less than you might think, because the main advantage of buying — keeping the car after the payments stop — is one you have decided not to take. Compare the lease against buying and selling on the same cycle, which is what setting the comparison period to your lease term does here.
Related calculators
An estimate. It excludes mileage and wear charges, insurance differences, gap coverage and any business tax treatment, each of which can change the answer.