Car Lease vs Buy Calculator
Compare total cost of leasing versus buying a car including monthly payments, down payment, residual value, and depreciation over your ownership period.
Lease vs Buy is one of the most common financial decisions when getting a new vehicle. Each option has different costs, benefits, and trade-offs.
Leasing costs:
Total Lease Cost = (Monthly Payment x Months) + Down Payment + Fees
You return the car at the end. You never own it, so there is no resale value to recover.
Buying costs (with a loan):
Total Buy Cost = (Monthly Payment x Months) + Down Payment + Interest - Resale Value
After paying off the loan, you own the car outright. The resale value offsets your total cost.
Compare over the same number of months, or the answer is meaningless
This is where most lease-versus-buy comparisons go wrong, including an earlier version of this one. A typical lease runs 36 months and a typical car loan runs 60. Add up what each costs over its own term and you are comparing three years of one thing against five years of another, so the longer plan always looks more expensive. That is not a finding, it is arithmetic.
The calculator uses the lease term as the shared horizon. At the end of it:
- The lease is finished. You hand the keys back and own nothing, and if you want a car you start again.
- The loan is not finished. You have made 36 of 60 payments and still owe a balance, but you own a car.
So the honest cost of buying over 36 months is the payments made, plus the down payment, plus the balance still outstanding, minus what the car is worth. That last figure does most of the work, which is why the resale value matters more than the interest rate here.
A three-year-old car is typically worth 55 to 70% of what you paid, with the sharpest drop in year one. Luxury marques and electric cars usually fall faster; trucks and a handful of Japanese models hold value better. Get a real trade-in quote before trusting any of this, because the difference between a private-sale estimate and what a dealer will actually hand you is often several thousand dollars.
Key differences:
| Factor | Lease | Buy |
|---|---|---|
| Monthly payment | Lower | Higher |
| Ownership | No | Yes |
| Mileage limits | Yes (typically 10k-15k/year) | No |
| Customization | Limited | Full freedom |
| Long-term cost | Higher if repeating | Lower over 5+ years |
| Maintenance | Often under warranty | Your responsibility after warranty |
When leasing makes sense: You prefer new cars every 2-3 years, drive low miles, and want lower monthly payments.
When buying makes sense: You plan to keep the car 5+ years, drive high miles, or want to avoid ongoing payments.
The break-even point is typically around 3-4 years. Beyond that, buying almost always costs less.
How we build and check this calculator
This calculator runs entirely in your browser, so the numbers you enter stay on your device. The math behind it is written by hand and tested against worked examples and standard references before the page goes live.
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