Lease vs Buy Car Calculator
Whether to lease or buy a car depends on how you use the vehicle, how long you plan to keep it, and how much you value flexibility versus ownership equity. Leasing offers lower monthly payments and the ability to drive a new vehicle every few years, but you never build equity and face mileage and condition penalties at lease end. Buying costs more per month initially, but after the loan is paid off you own an asset you can sell or keep payment-free. To compare the two options fairly, this calculator looks at the total out-of-pocket cost over the same time period. The lease cost includes all monthly payments plus acquisition and disposition fees. The buying cost includes the down payment and all monthly loan payments, then subtracts the vehicle's residual (resale) value at the end of the comparison period, because when you buy you keep an asset. Comparing these net figures side-by-side shows which option genuinely costs less over the period in question, and by how much.
Total lease cost: -- | Total buy cost: --
Lease details
Buy details
Understanding the comparison
The lease cost is straightforward: all monthly payments plus any upfront and end-of-lease fees. The buying cost calculation subtracts the vehicle's estimated value at the end of the comparison period, because when you buy you end up owning an asset. This "net cost of ownership" approach makes the comparison fair.
Note that this comparison covers only the financing cost. Both options share similar running costs (insurance, fuel, maintenance). Leases often include a warranty for the full term, potentially reducing maintenance costs during the lease period.
Lease vs buy: frequently asked questions
What fees are included in leasing costs?
A typical car lease involves an acquisition fee (charged by the lender, usually $400 to $1,000), a disposition fee at lease end (typically $300 to $500 if you do not purchase the vehicle), and possibly a security deposit. Monthly lease payments are also lower than loan payments for the same vehicle because you are only paying for the portion of value you use (the depreciation during the lease term), not the full purchase price.
What is residual value in a lease?
The residual value is the estimated market value of the vehicle at the end of the lease term, set by the leasing company at the start of the contract. It determines your monthly payment: a higher residual means a lower monthly payment because less depreciation is factored into the payment. If you want to buy the car at lease end, you purchase it at the residual value.
Does buying always come out cheaper over time?
Buying typically becomes cheaper than leasing over a long period because once the loan is paid off you own an asset with resale value and have no further payments. Leasing means you always have a payment. However, if you factor in the opportunity cost of the larger down payment typically required for purchase, and the cost of repairs on an older owned vehicle, the gap narrows.
What happens if I go over the mileage limit on a lease?
Most leases include a mileage allowance (commonly 10,000 to 15,000 miles per year). Exceeding the limit triggers per-mile excess charges, typically $0.15 to $0.30 per mile. This can significantly increase total lease cost. This calculator does not model excess mileage charges; if you drive more than the standard allowance, add the estimated overage cost to the lease total.
Which option is better for people who like a new car every few years?
Leasing is well suited to people who prefer always driving a new vehicle and want predictable monthly payments without the hassle of selling or trading. However, you build no equity in a leased vehicle. Buying and then selling or trading every few years is typically more cost-effective if you can handle the variability of the used car market.
References
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. For informational purposes only. See our methodology.