Car Lease vs Buy Calculator
Compare the total cost of leasing vs financing a car over your ownership horizon, including resale value and equity.
Should you lease or buy your next car?
Leasing and buying a car answer the same need in very different ways. A lease is essentially a long-term rental: lower monthly payments and a smaller amount due upfront, but you return the car at lease end and build no ownership. Buying — with cash or a loan — costs more per month and more upfront, but you end up owning an asset you can keep driving or sell. That resale value is the crux of the comparison: it offsets a large share of the cost of buying, which is why a lower lease payment does not automatically make leasing cheaper.
This calculator compares the total cost of ownership over the horizon you choose. For leasing it adds the down payment, the monthly payments, and any end-of-lease fees. For buying it adds the down payment and loan payments, subtracts the car’s resale value, and accounts for any loan balance still owed at the end. To keep the comparison fair, both paths are credited the opportunity cost of their up-front cash at your chosen return — the money you could have earned by investing it instead. The result shows the total cost of each option, the difference, and the equity a buyer holds at the end.
As a general pattern, buying is usually cheaper per year of use over a long horizon, because you eventually own the car outright, while leasing can be competitive over short horizons if you like driving a new vehicle every few years. Leasing also suits drivers who want predictable payments and full warranty coverage, or business use where payments may be deductible. Watch the mileage limit, though: leases charge a per-mile fee for going over the cap, and there can be wear-and-tear charges at return. Enter your own terms above to see which is cheaper for you.