Car Lease vs. Buy Calculator
Compare what a car really costs you over the same period if you lease it versus finance and own it — including the equity you keep when you buy.
How to compare leasing and buying fairly
A lease payment is almost always lower than a loan payment on the same car, but that comparison is misleading: when a lease ends you hand the car back, while a buyer keeps a car with real resale value. This calculator compares both options over the same period — the length of the lease.
- Cost to lease = down payment (cap cost reduction) + all lease payments + fees.
- Net cost to buy = down payment + loan payments made during that period − your equity at the end (the car's value minus what you still owe).
When leasing tends to win
Leasing can come out ahead when the manufacturer offers subsidized lease deals, when the car depreciates faster than expected, or when you always want a new car every few years anyway. It tends to lose when you drive a lot of miles (watch excess-mileage charges) or would otherwise keep a car for many years after paying it off — the cheapest years of car ownership are the ones with no payment at all.
Choosing the resale value
Resale value is the biggest unknown. Look up what similar three-year-old models are selling for, or use the lease's residual value from your quote as a reasonable estimate. Try a few values to see how sensitive the answer is. To see the full cost of a purchase loan, use the car loan calculator.
Frequently asked questions
Is it smarter to lease or buy a car?
Over the long run, buying and keeping a reliable car for many years is usually cheapest. Over a short window, a good lease deal can cost less — which is what this calculator measures.
What is a residual value?
It's the leasing company's estimate of the car's value at the end of the lease, set as a percentage of MSRP. Your payment largely covers the difference between the price and the residual, plus finance charges.
Can I buy my car at the end of a lease?
Usually yes, at the residual value stated in your contract plus any purchase fee. That can be a good deal if the car is worth more than the residual.
Do I pay sales tax on a lease?
In most states, sales tax is charged on each monthly lease payment rather than on the full price upfront. Make sure the lease payment you enter includes tax.