Should you lease or buy the same car? This calculator compares both over the lease term. Enter the purchase price, loan rate and term, cash down, an assumed resale value and the quoted lease costs. The biggest limit: resale value is your own estimate, and it can flip the answer.
Monthly payments alone miss two things: the value you still own after buying, and any loan balance left when a shorter lease would have ended. Inputs start blank, and the Load example figures are hypothetical.
Car lease vs. buy calculator
This calculator runs in your browser. This calculator’s code does not send, save, or track your entries. All dollar amounts are USD.
Optional example: Inputs start blank. Load example fills hypothetical figures without calculating. Examples are not current rates, quotes, or recommendations.
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The lease term is the shared horizon. The tool combines a quoted, tax-inclusive lease payment with an estimated amortizing purchase loan. It does not build a lease quote from a money factor, and it does not predict a car’s future value.
Should you compare cash outlay or net cost?
Both, because they answer different questions. Cash outlay is what leaves your account during the comparison. Net cost also counts the loan you still owe and the car you could sell.
| Measure | Buying | Leasing and returning |
|---|---|---|
| Ordinary cash outlay through the horizon | Cash down plus scheduled loan payments actually made | All quoted monthly payments plus genuinely additional upfront and end fees |
| Remaining obligation at the horizon | Loan payoff if the loan term is longer | No remaining scheduled payments at normal lease end |
| Ownership value | Assumed resale value less remaining loan balance | No owned vehicle assumed |
| Net cost | Cash outlay plus loan payoff minus assumed resale proceeds | Modeled lease cash outlay |
| Key uncertainty | Resale proceeds and actual payoff conditions | Additional return charges and completeness of the quote |
The FTC advises keeping your attention on the total cost, not just the monthly payment. It notes that lower monthly loan payments often require longer terms and higher interest rates.
A longer buy loan can shrink the payment while leaving debt after a shorter comparison horizon. The calculator counts that remaining debt instead of treating the car as paid off.
How do you enter each cost only once?
- Purchase price: use the negotiated vehicle price. If you enter an out-the-door price that already contains taxes and fees, do not repeat those amounts under additional purchase costs.
- Purchase costs and cash down: the model finances price plus additional costs minus total cash paid upfront. If you pay taxes in cash, include them in the cost pool and in total cash down. Cash down cannot exceed the full acquisition cost.
- Loan rate and term: the model uses the entered annual rate divided by 12 as monthly interest, with fixed end-of-month payments. A disclosed APR that includes finance charges may not equal the contract interest rate, so use the contract rate rather than double-counting finance charges.
- Resale value: enter your assumed sale proceeds at the lease-length horizon. It is an estimate, not a trade-in offer or the lessor’s contractual residual.
- Lease payment: enter the actual quoted monthly amount, including tax and any fees already built into it.
- Additional lease upfront cash: include separately paid, nonrefundable costs and any separate capitalized-cost reduction. Exclude prepaid monthly installments and refundable deposits.
- Lease-end fees: include known or deliberately assumed return charges only if they are not already counted elsewhere.
The Federal Reserve’s vehicle-leasing guide explains that most leases require monthly payments in advance, which is why the first monthly payment is typically due at lease signing. This tool already multiplies the quote by the full lease term.
So if a 36-month, $400 lease lists $2,400 due at signing, made up of the first $400 payment and $2,000 of other costs, enter $2,000 as additional upfront cash. Entering $2,400 would count the first payment twice. The same rule applies to any other prepaid scheduled installment.
Is leasing or buying cheaper in a hypothetical 36-month example?
Inputs. This is a hypothetical example. Buy: $30,000 purchase price, $2,000 in additional taxes and costs, $5,000 cash down and a 60-month loan at 6%. Lease: 36 months at $400 per month including tax, $2,000 of additional nonrefundable upfront cash and $350 at return. Assume the purchased car sells for $18,000 after month 36.
Formula. Amount financed = $30,000 + $2,000 − $5,000 = $27,000. Monthly interest is 6% ÷ 12 = 0.5%, which gives a 60-month payment of $521.99. Buy net cost = cash outlay + remaining loan − resale. Lease cost = $400 × 36 + $2,000 + $350.
| Measure | Buy | Lease |
|---|---|---|
| Monthly payment | $521.99 | $400.00 |
| Scheduled monthly payments through month 36 | $18,791.48 | $14,400.00 |
| Cash outlay before sale and loan payoff | $23,791.48 | $16,750.00 |
| Remaining purchase loan | $11,777.49 | Not applicable |
| Assumed equity | $6,222.51 | No ownership |
| Net cost | $17,568.98 | $16,750.00 |
Result. Buying nets out at $32,000 of acquisition costs + $3,568.98 interest − $18,000 resale = $17,568.98. Leasing is $400 × 36 + $2,000 + $350 = $16,750. On these assumptions, leasing is $818.98 lower.
What to check. That gap is small next to the resale guess. Raising assumed resale by $1,000 lowers the modeled buy cost by exactly $1,000, to $16,568.98, which reverses the result. Try a low and a high resale value before deciding, and ask the lender for an actual payoff figure rather than relying on the estimated balance.
What stays outside the estimate?
The lease path assumes a normal return at term end. The FTC notes that most standard leases cap annual mileage at 15,000 or less, that exceeding the cap will probably trigger a fee, and that lessees are responsible for excess wear, required servicing and insurance that meets the leasing company’s standards.
The tool does not estimate any of those amounts automatically. Enter known return charges once, and remember that mileage and condition also change the resale value on the buy side.
Fuel, insurance differences, repairs, maintenance, selling expenses, prepayment charges, trade-ins, incentives not reflected in the entered price, inflation and the opportunity cost of upfront cash are excluded. Refundable lease deposits are excluded too, so cash outlay does not show temporary deposit funding.
The comparison adds nominal dollars without discounting. It does not value the timing difference between lease payments due in advance and loan payments due at month end.
To add running costs for the car you keep, use the cost per mile calculator. To set cash aside for known lease-end or repair charges, see the sinking-fund planner.
When does this car lease vs. buy calculator not fit?
- You plan to buy out the lease or end it early. Only a normal return at term end is modeled. The FTC warns that ending a lease early may cost a substantial amount, so get the contract’s early-termination terms instead.
- You would keep the purchased car well past the lease term. The comparison stops at the lease horizon and does not model later years of ownership or a second lease.
- You only have a money factor and capitalized cost, not a quoted payment. The tool needs the dealer’s actual monthly lease payment and cannot build one from lease-rate components.
- You expect to drive well above the lease mileage cap. Excess-mileage charges are not estimated; you would have to enter a figure you trust as a lease-end fee.
How the calculator handles inputs and rounding
Let P be the financed amount, r = annual rate ÷ 1200, and n the loan term in months. The scheduled payment is P × r ÷ [1 − (1 + r)−n]. At a zero rate, it is P ÷ n. Each month adds interest to the remaining balance and then subtracts the payment. The model stops charging loan payments when the loan ends, even if the comparison horizon is longer.
Equity = assumed resale value − remaining loan. Equity can be negative. Net ownership cost = purchase cash outlay − equity. The same result equals acquisition price and costs plus interest paid through the horizon minus resale value. Paying down principal builds equity; it is not an extra cost to add twice.
Internal values stay unrounded, so adding the rounded figures in the table by hand can differ from the displayed net cost by a cent. Estimated loan balances are not lender payoff quotes.
Quick decision checklist
- Get a written lease quote showing the monthly payment, amount due at signing and return fees.
- Split the amount due at signing so the first monthly payment is not entered twice.
- Use the loan’s contract rate and the term you would actually sign.
- Run a low and a high resale value and see whether the answer changes.
- Check the lease mileage cap against how much you really drive.
Sources and calculation review
- FTC: Financing or Leasing a Car, for total cost versus monthly payment, mileage limits, excess wear, servicing, insurance and early-termination considerations.
- Federal Reserve: Vehicle Leasing, Leasing vs. Buying, Up-Front Costs, for payment timing and distinctions among prepaid installments, capitalized cost reductions and refundable deposits. This explanatory guide was last updated May 5, 2003; it is not current rate or tax guidance.
Sources rechecked September 28, 2026. The example was checked against independent loan-payment and remaining-balance equations.
Prepared with AI-assisted research, drafting, and calculation checks. Not independently reviewed by a human financial professional.
