Lease or Buy Calculator

Lease vs. Buy Calculator

Compare leasing and buying the same car over the same period — including the value you keep when you buy — and see which one really costs less.

If you buy

If you lease

Cheaper option
—
over the comparison period
Net cost to buy
$0
Net cost to lease
$0

Estimates for planning only. "Net cost to buy" counts your cash out plus any remaining loan balance, minus the car's resale value (the equity you keep). Sales tax, insurance, mileage penalties, and fees are not included. This is general education, not financial advice.

Lease vs. buy: how the comparison really works

Comparing a lease payment to a loan payment head-to-head is misleading, because the two buy you completely different things. A lease payment rents the car for a few years; a loan payment builds toward owning it. To compare fairly, you have to look at the net cost over the same period — and credit buying for the value you still hold at the end.

This calculator does exactly that. For buying, it totals your down payment and the loan payments you'd make during the period, adds any balance you'd still owe, then subtracts the car's resale value — what you could sell it for. For leasing, it totals the amount due at signing plus every lease payment. Whichever net cost is lower wins for that timeframe.

When leasing makes sense

  • You like driving a newer car every two to three years.
  • You want lower monthly payments and predictable costs (often under warranty the whole time).
  • You drive a low-to-moderate number of miles each year.
  • You'd rather hand the car back than deal with selling it.

The trade-off: you never build equity, and going over the mileage limit triggers per-mile penalties.

When buying wins

  • You keep cars for many years — the longer you drive a paid-off car, the cheaper it gets.
  • You drive a lot of miles and would blow past lease limits.
  • You want to build equity and eventually have no car payment at all.
  • You want the freedom to modify, sell, or trade whenever you choose.

Over the full life of a vehicle, buying and keeping it is almost always the cheaper path.

Watch the mileage and wear

Leases cap your annual mileage — commonly 10,000 to 15,000 miles — and charge roughly 15 to 30 cents for every mile over. They also bill you for wear and tear beyond "normal" at the end. If you drive more than the limit or are hard on a car, those charges can wipe out the savings from a lower monthly payment. Always size a lease to your real mileage, not your hoped-for mileage.

Frequently asked questions

Is it cheaper to lease or buy a car?
Short term, leasing often has lower payments and a smaller upfront cost. But when you buy, you keep the car and its remaining value, so over the full life of the vehicle buying is usually cheaper. This tool compares the net cost of both over the same period, including the equity you keep when you buy.
How does this lease vs. buy calculator work?
For buying, it adds your down payment and the loan payments made during the period, adds any balance you'd still owe, then subtracts the car's resale value. For leasing, it adds the amount due at signing plus all lease payments over the same term. The lower net cost wins.
When does leasing make sense?
If you want a newer car every few years, prefer lower payments and predictable costs, drive low-to-moderate miles, and don't want to sell the car later. You never build equity, though, and mileage/wear charges add up.
When is buying the better choice?
If you keep cars for years, drive a lot, want to build equity and eventually have no payment, or like the freedom to modify or sell anytime. The longer you keep a paid-off car, the cheaper it gets.
What is a mileage limit on a lease?
Most leases cap miles per year (often 10,000-15,000). Go over and you pay a per-mile penalty (about 15-30 cents). Heavy drivers can lose the lease's savings to these charges, so use your real mileage.
Do I build any equity when I lease?
No. A lease is essentially a long-term rental — you pay for depreciation and fees and return the car with nothing to show for it. Buying builds toward an asset you can later sell or drive payment-free.

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