Car Lease vs Buy Calculator
Lease and purchase details
Required fields are marked with an asterisk. Use figures from actual dealer lease disclosures and loan offers when available.
Enter both offers to compare them.
For a quick demonstration, choose Load example.
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How to compare a car lease with buying
- Use the lease worksheet for MSRP, adjusted price, term, residual percentage, money factor, and all due-at-signing or end charges.
- Use a written purchase offer for price, taxes, fees, down payment, trade credit, APR, and loan term.
- Estimate what the purchased car could sell for when the lease ends. This value often has the greatest effect on the result.
- Enter realistic annual miles so lease overage is included.
- Compare total net cost as well as the monthly payment. A financed buyer still owns equity, or owes a shortfall, at the comparison date.
Formulas and assumptions
Estimated lease payment
residual = MSRP × residual %adjusted cap cost = negotiated lease price + capitalized fees − cap cost reductionbase payment = (adjusted cap cost − residual) ÷ term + (adjusted cap cost + residual) × money factorpayment with tax = base payment × (1 + tax rate)
The total lease cost adds the capitalized cost reduction, upfront fees, all scheduled payments, estimated excess-mile charges, disposition and wear charges, and other entered costs. The first payment is included once in the scheduled payments; it is shown in due-at-signing only to describe timing.
Estimated purchase payment and equity
amount financed = price + purchase tax + fees − cash down − trade creditpayment = principal × r ÷ (1 − (1 + r)−n)purchase equity at horizon = resale value − remaining loan balancenet purchase cost = down + trade equity + payments made + other costs − purchase equity
The loan uses a fixed nominal APR divided into monthly periods and standard level-payment amortization. The comparison is in nominal dollars; it does not apply investment returns, inflation, or a discount rate.
Taxes, fees, and costs not entered
Lease tax rules vary widely. This estimate taxes each base lease payment. If your jurisdiction instead collects tax upfront or taxes another base, add the quoted tax to Other upfront fees and set the rate as needed. Fuel, insurance, registration renewals, parking, and maintenance matter only to the difference when they are not the same for both options; enter differing totals in the two Maintenance & other costs fields.
What the comparison measures
| Cost or value | Lease | Buy |
|---|---|---|
| Monthly financing cost | Depreciation + rent charge + payment tax | Principal + loan interest |
| Upfront contribution | Cap cost reduction + upfront fees | Cash down + trade-in equity |
| Value at comparison date | None assumed after return | Resale value less loan payoff |
| Mileage effect | Estimated contractual overage charge | Reflected indirectly in resale estimate |
| End charges | Disposition and entered wear charges | None unless entered as other cost |
A lower lease payment does not automatically mean a lower total cost. Likewise, adding the full remaining loan balance to buying without also crediting the vehicle's resale value overstates the cost of ownership. This calculator keeps both sides on the lease-length horizon.
Consumer references
- The Consumer Financial Protection Bureau's leasing-versus-buying guide explains negotiated lease cost, residual value, rent charge, term, mileage, and the role of depreciation.
- The CFPB's Regulation M disclosures define capitalized cost reduction, adjusted capitalized cost, residual value, depreciation, rent charge, and required motor-vehicle lease payment disclosure.
- The Federal Trade Commission's financing or leasing guide recommends comparing the written out-the-door price and accounting for lease mileage and wear responsibilities.
- The CFPB's auto-loan comparison guidance emphasizes amount financed, APR, term, monthly payment, and total cost rather than payment alone.
Frequently asked questions
Is leasing or buying a car cheaper?
There is no universal winner. Leasing is sensitive to the negotiated cap cost, residual, money factor, fees, and mileage. Buying is sensitive to price, APR, loan length, and resale value. Use actual offers and compare the same period.
Why is the remaining auto loan balance included?
If the lease ends before the purchase loan does, the unpaid balance still exists. The calculator offsets that liability with the car's estimated resale value to show positive or negative purchase equity.
What is a lease money factor?
A money factor is used to estimate the lease rent charge. Multiplying it by 2,400 produces a rough APR-style percentage, but that shortcut is not the same as a disclosed loan APR.
How are excess-mile charges calculated?
The annual allowance and expected annual mileage are prorated over the lease term. Only expected miles above the allowance are multiplied by the per-mile overage rate.
Does this include insurance, fuel, and maintenance?
Not automatically. If a cost differs between leasing and buying, add the total difference to the relevant Maintenance & other costs field. Identical costs cancel out of the comparison.
How is sales tax handled?
The lease side applies tax to the base monthly payment. The buy side taxes the purchase price, optionally after trade-in. Add upfront lease tax to upfront fees when that better matches your quote. Local rules vary.
Does a large lease down payment make leasing cheaper?
It lowers the monthly payment, but the calculator still includes that cap cost reduction in total lease cost. Paying more upfront changes timing more than it changes the underlying lease economics.
What is the break-even resale value?
It is the purchased car's resale value that would make the buy option's estimated net cost equal the lease's estimated total cost, with all other inputs unchanged.
Are the results financial advice?
No. The result is an estimate based only on the entered figures and stated assumptions. Compare actual disclosures and contracts, and consider professional guidance when appropriate.
Is my information private?
Yes. Calculations, copied summaries, and CSV files are created locally in your browser. The values you enter are not uploaded or stored by this tool.