Lease vs. Buy Auto Calculator

Enter your lease and purchase numbers to compare the total net cost of leasing versus buying over the same time period.

Lease vs. Buy Auto Calculator

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Monthly lease payment ($)

Lease down payment/fees ($)

Purchase price ($)

Purchase down payment ($)

Loan interest rate (% annual)

Assumed depreciation rate (%/year)

Time period (months)

Total lease cost	$21,580.72
Loan payment	$1,241.28/mo
Estimated resale value at end	$26,407.37
Total buy cost (net of resale)	$20,778.87
Difference (lease - buy)	-$801.85 (buying is cheaper)

Compares pure dollar cost only over the SAME time period - doesn't capture non-financial factors like driving a newer car every few years (leasing) or building equity and avoiding future payments after payoff (buying). Excludes maintenance, insurance, and taxes, which can differ between the two options.

The formula

Total lease cost = (Monthly lease payment x months) + lease down payment/fees Loan payment = standard amortization formula on (Price - down payment) Total buy cost = (Loan payment x months) + down payment - estimated resale value at the end

Example

$530/mo lease with $2,500 down over 36 months: total lease cost $21,580.72. Buying the same $43,000 car with $2,500 down at 6.5%: loan payment $1,241.28/mo, resale value after 3 years (at 15% annual depreciation) about $26,407 - a net buy cost of $20,778.87, making buying about $802 cheaper in this scenario.

Step-by-step guide

Get a lease quote and a purchase quote for the same or comparable vehicle, over the same time period - comparing a 36-month lease to a 60-month loan isn't apples-to-apples.
Enter your best estimate for the vehicle's depreciation rate - this drives the resale value assumption on the buying side, and is the single most uncertain input in the whole comparison.
Compare the total net costs - remember this captures only the dollar difference, not lifestyle factors like driving a newer car more often (a lease benefit) or having no payment at all after a loan is paid off (a buying benefit).

Why this comparison is more subtle than "leasing is always worse"

A common financial rule of thumb says buying always wins over leasing in pure dollar terms, and over a long enough ownership period (especially once a loan is paid off and the car is driven payment-free for years), that's usually true. But over a SHORTER, fixed comparison window - especially for a vehicle with strong resale value - the math can go either way, as this calculator's default numbers show. The real answer depends heavily on how long you plan to keep the vehicle, how well that specific model holds its value, and whether you place any value on the non-financial benefits of leasing (driving a newer car, avoiding major repair bills, simpler end-of-term logistics).

Common mistakes

Comparing costs over mismatched time periods - a 3-year lease against a 6-year loan isn't a fair comparison, since the buying side gets extra payment-free years this tool doesn't capture unless you set the comparison window correctly.

Ignoring mileage limits when comparing - if you drive significantly more than a typical lease's annual allowance (often 10,000-15,000 miles), overage charges can meaningfully change the true cost of leasing versus what a simple payment comparison suggests.

Frequently asked questions

Does this account for maintenance and insurance cost differences?

No - this compares only the financing and depreciation side. Insurance is often somewhat higher for leased vehicles due to required coverage minimums, while maintenance costs are typically similar since both scenarios involve a similarly new vehicle during the comparison period.

What happens at the end of a lease versus the end of a loan?

At lease end, you typically return the vehicle (or buy it at the predetermined residual value) and have no ongoing car payment. At loan payoff, you own the vehicle outright and could keep driving it payment-free, sell it, or trade it in - the loan path leaves you with an actual asset.

Is the depreciation rate the most important input in this comparison?

Often yes - since the resale value estimate directly offsets the buying cost, a vehicle that holds its value unusually well can make buying look meaningfully better than this calculator's default assumption suggests, and vice versa for a fast-depreciating model.

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