Car Lease vs Buy Calculator
Whether leasing or buying a car costs less over the same few years.
Good to know. A lease is paying for the part of the car you use up. The trick is knowing how big that part is.
Not financial advice. Uses only the numbers and rates you enter — no live data.
How it works
In plain words
Leasing costs what you pay at signing, the monthly payments and the fees at the end. Buying over the same months costs the down payment and the loan payments, plus what you still owe, minus what the car is then worth. The cheaper one wins.
The formula
lease = due at signing + monthly × term + end fees buy = down payment + loan payments over the term + balance still owed − car’s value
Worked example
Leasing for 36 months costs 3,000 + 36 × 420 + 400 = 18,520. Buying costs 5,000 down and 36 loan payments of 594.04, plus 13,268 still owed, minus the car’s value of 19,250: 20,403. Leasing saves 1,883.15 here.
Sources
- Brealey, Myers and Allen, Principles of Corporate Finance, chapter 2 The standard formulas for loan payments, compounding and present value, the same as a spreadsheet’s PMT and FV.
- Consumer Financial Protection Bureau, Auto loans: leasing How leases, residual values and end-of-lease fees work.
Sources checked September 30, 2026. 5 automated tests check its answers on every change.
About the car lease vs buy calculator
Leasing and buying both get you a car, but they spend money differently. With a lease you pay for the value the car loses while you drive it, plus interest and fees, and hand it back. With a loan you pay for the whole car, but at the end you own something you can sell. To compare them fairly, look at the same period and count the car’s value at the end.
That is what this calculator does. It adds up everything the lease costs over its term, and everything buying costs over the same months: the down payment and loan payments so far, plus what you would still owe, minus what the car would sell for. The car’s future value is the biggest uncertainty; used-car guides and listings for three-year-old versions of the same model are a good way to estimate it.
Leasing tends to win when the lease has a low interest rate or manufacturer deals, when the car loses value quickly, and when you like a new car every few years. Buying tends to win when you keep cars for a long time: after the loan is paid off, driving costs only running costs for years.
Check the mileage limit on a lease. Going over costs about 15 to 30 cents a mile in the US, and excess wear is charged at the end too. Include what you expect in the end fees.
Questions people ask
Is it cheaper to lease or buy a car?
Over the lease term they are often close. Over longer periods buying usually wins, because you keep driving after the loan is paid off.
What happens at the end of a car lease?
You hand the car back and pay any disposition fee and charges for extra miles or wear, or buy it for the residual value in the contract.
What is a good residual value for a lease?
A high one: the more of the price the car keeps, the less of it the lease payments have to cover. 55–65% after 3 years is typical of cars that hold value well.