Car lease vs. buy calculator: compare the cost over the same few years
A lease payment is almost always lower than a loan payment on the same car, which makes leasing look cheaper. But at the end of a lease you hand the car back, while a buyer has a car with some value left, and maybe some loan left too. This calculator compares the two over the same period, counting what you’d own and owe at the end.
Car lease vs. buy calculator
- Cheaper over 36 months
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- Cost to lease
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- Cost to buy
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- Loan payment
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Compares costs over the lease term only. Buying cost is the down payment and loan payments made during that time, plus what you’d still owe, minus what the car would be worth. Insurance, maintenance and fuel are treated as the same either way, though they can differ. Sales tax rules on leases vary by state; use prices and payments that include tax. What your cash could have earned elsewhere is not included. Everything here runs in your browser; nothing you enter is stored or sent.
What this calculator can help you understand
- What leasing and buying would each cost over the lease term.
- What you’d still owe on a loan at the end of that period.
- How the car’s future value changes the comparison.
When it’s useful
- When a dealer offers both a lease and financing.
- When your current lease is ending.
- When you’re deciding how long you’d keep a car.
Who it’s for
- Anyone shopping for a new car.
- Drivers who like a new car every few years.
- People weighing a lower monthly payment against long-term cost.
What to enter
| Input | What it means | Where to find it |
|---|---|---|
| Monthly lease payment | The lease payment, including tax | The lease quote |
| Due at signing | Down payment, first payment and fees due up front | The lease quote |
| Lease term in months | Length of the lease | The lease quote |
| Fees at lease end | Disposition fee, plus any expected mileage or wear charges | The lease contract |
| Price | The price you’d pay, including tax and fees you’d finance | The purchase quote |
| Down payment | Cash you’d put down | Your savings |
| Loan rate | The auto loan rate you’d get | A lender or dealer quote |
| Loan term in months | Length of the loan | The loan quote |
| Value at the end of the lease term | What the car would be worth then | The lease’s residual value, or used car guides |
How to use it
- Enter the lease terms from the dealer’s quote.
- Enter the purchase price, down payment and loan terms.
- Estimate what the car will be worth when the lease would end.
- Read which costs less over the lease term, and by how much.
- Try a lower and higher future value to see how much it matters.
Understanding your results
- Cost to lease = due at signing + lease payments + fees at lease end.
- Cost to buy = down payment + loan payments during the lease term + loan balance still owed − the car’s value.
- Cheaper over the lease term shows the difference between the two.
A worked example
Suppose you can lease a car for $450 a month for 36 months, with $3,500 due at signing and a $400 disposition fee. Or you can buy it for $38,000 with $4,000 down and a 60-month loan at 6.5%. After three years, it would be worth about $22,000.
- Leasing: about $20,100 over three years.
- Buying: loan payments of $665.25 a month. After 36 months you’d still owe $14,934 on a car worth $22,000, so buying costs about $20,883 over the same period.
- Result: leasing is about $783 cheaper over these three years, but you’d have no car at the end.
- If the car is worth $20,000, leasing is ahead by $2,783; at $24,000, buying is ahead by $1,217.
Common mistakes
- Comparing monthly payments only.
- Ignoring mileage limits and wear charges.
- Forgetting what you’d own. A bought car still has value after the loan.
- Comparing different time periods. Keep both options to the same number of months.
What to do with your result
- If you plan to keep a car for many years, buying usually costs less once the loan is paid off.
- See the full loan cost, including trade-in and tax, with the auto loan calculator.
- Check how either payment fits your budget with the debt-to-income calculator.
Limitations to keep in mind
The comparison covers the lease term only. It doesn’t count insurance, maintenance or fuel differences, what your down payment could earn elsewhere, state sales tax rules, or incentives that differ between leasing and buying. Future car values are estimates. This isn’t financial advice.
Frequently asked questions
Is leasing ever cheaper than buying?
Over a single lease term, it can be, especially when the car loses value quickly or a lease has manufacturer incentives. In our example, leasing is $783 cheaper over three years. Over longer periods, keeping a paid-off car usually costs less.
What is a residual value?
The value the leasing company expects the car to have at the end of the lease. It’s a reasonable guide to what a bought car might be worth at that point, though actual values vary.
What happens if I drive more than the lease allows?
You’ll pay a charge for each mile over the limit, set in the lease. Mileage limits of 10,000 to 15,000 miles a year are common. Add expected charges to the lease-end fees.
Can I buy the car at the end of a lease?
Usually, at the buyout price in your contract. That can make sense if the car is worth more than the buyout.
Why does the result change so much with the car’s value?
Because the buyer keeps that value. In our example, if the car is worth $24,000 instead of $22,000, buying comes out ahead by $1,217.
Is sales tax handled differently on leases?
In many states, you pay sales tax on each lease payment rather than the full price. Rules vary by state, so use payments and prices that include tax.
Related calculators
This calculator gives estimates for illustration, based on the figures you enter and the assumptions described on this page. It isn’t financial, tax or legal advice, an offer, or a guarantee of any outcome.