Lease vs Buy Calculator (Car)
This lease vs buy calculator compares the real net cost of leasing a car against financing and keeping it — accounting for the resale equity you'd have if you bought, not just the monthly payment difference. Enter your terms to see which comes out ahead.
The negotiated price, used for both the lease and purchase comparison.
How long you'd lease, or the loan term if buying — kept the same for a fair comparison.
What the car is worth at the end of the term, as a percentage of its price — used for both the lease residual and the buy-side resale assumption.
Multiply by 2,400 for the equivalent APR.
Applied the same way to both the lease and the purchase for a fair comparison.
The interest rate if you finance the purchase.
Applied to the lease payment, and to the purchase price if buying.
Buying advantage over leasing
-$204
Positive means buying and keeping the car works out cheaper over the term; negative means leasing does.
How to use this lease vs buy calculator
- 1Vehicle price and comparison term: kept the same for both options so the comparison is fair.
- 2Residual/resale value: used both as the lease's residual value and as the assumed resale value if you bought and sold at the end of the term.
- 3Down payment: applied the same way to both options, since it's cash you'd spend either way.
Understanding your results
Buying advantage over leasing is the bottom line: positive means owning and reselling at the end of the term costs less overall than leasing; negative means leasing wins. Net cost of buying already subtracts the resale value you'd recover — buying only 'wins' once that resale value is accounted for, not just by comparing raw payments.
The formula
Buying advantage = Total lease cost − (Total loan payments − Resale value at end)The lease side uses the standard lease-payment formula (depreciation plus rent charge, taxed). The buy side totals the loan payments over the same term, then subtracts the assumed resale value at the end — since that value is money you'd get back, unlike a lease where you return the car with nothing to show for it.
A worked example
A $35,000 car over 36 months, 55% residual/resale, $2,000 down: leasing costs about $479/month (including tax), for a total lease cost around $19,200. Buying with a 7% loan costs about $1,019/month, totaling roughly $38,700 in payments — but you'd have a car worth about $19,250 at the end, netting a real buy cost around $19,400. In this scenario leasing comes out slightly cheaper, by around $200 — close enough that maintenance costs (which a lease's warranty period often covers) could easily tip the real-world decision either way.
Notes for the UK, US and India
This comparison doesn't include maintenance, which leases sometimes bundle in (via the manufacturer's warranty period matching the lease term) while an owned car may need out-of-warranty repairs toward the end of a longer ownership period. It also doesn't include the opportunity cost of the money spent on payments — treat this as a solid first-pass comparison, not the final word for every personal situation.
Frequently asked questions
Does this account for mileage limits on the lease?+
No — leases typically cap annual mileage (commonly 10,000-15,000 miles) with per-mile penalties for going over. If you drive significantly more than that, factor in the excess-mileage cost separately, since it can meaningfully favor buying.
Why would buying ever cost more than leasing here?+
If your loan rate is high relative to the lease's money factor, or if the vehicle depreciates faster than the assumed resale percentage, the numbers can favor leasing — this is exactly why the calculator compares both rather than assuming one is always better.
Does this account for maintenance costs?+
No — maintenance isn't included on either side. A new lease is often within the manufacturer's warranty for its full term, while an owned car held past its warranty period may need more out-of-pocket repairs, which would favor leasing if that's a real concern for you.