Car Lease vs Buy Calculator
Should you lease or buy your next car? Enter the lease offer and the loan terms, choose how many years to compare, and see the total cost of each, the difference and the year when buying pulls ahead.
Last updated:
Negotiated price before tax.
Leasing repeats with the same terms for the whole period.
On the purchase price and on lease payments.
Before tax.
Down payment / cap cost reduction.
0 = pay cash.
Typical 12–20% a year; sets the resale value.
Out-of-warranty repairs and tires a lease would avoid.
How to use the Car Lease vs Buy Calculator
- Enter the car price, sales tax, your yearly miles and how many years to compare.
- Fill in the lease offer: monthly payment, term, due at signing, fees, mileage limit and overage fee.
- Fill in the loan: down payment, fees, APR and term (0 months to pay cash).
- Set depreciation and extra upkeep after warranty.
- Compare the totals, the difference and the year-by-year chart.
How lease vs buy is compared
Lease total = monthly payment × (1 + tax) × months + (due at signing + fees) × number of leases + excess-mileage charges.
Buy net cost = down payment + loan payments made + loan balance left − resale value + extra upkeep after year 3. The loan payment is P × r ÷ (1 − (1 + r)−n), where P is the amount financed, r the monthly rate and n the number of months. Resale value = price × (1 − yearly depreciation)years.
Because both totals cover the same period and the same driving, the difference shows how much more one option costs. Money you'd save each month could also be invested, so a small difference may not decide it on its own.
Leasing vs buying at a glance
| Leasing | Buying with a loan | |
|---|---|---|
| Monthly payment | Usually lower | Higher, ends when the loan is paid |
| Ownership | Return the car at the end | You own it and can sell it |
| Mileage | Yearly limit, fees for extra miles | Unlimited |
| Wear and customization | Charges for excess wear; few modifications | Your choice |
| Repairs | Mostly under warranty | Out of warranty after a few years |
| Best for | New car every 2–3 years, low mileage | Keeping a car 5+ years, high mileage |
Frequently asked questions
Is it cheaper to lease or buy a car?
Over a short period, leasing often has lower out-of-pocket costs, but over five years or more, buying and keeping the car is usually cheaper because you stop making payments and still own an asset with resale value. The chart shows the year when buying becomes cheaper for your numbers.
How is the net cost of buying calculated?
Net cost = down payment + loan payments made + any loan balance still owed − the car's resale value at the end, plus extra repairs you enter. Selling the car gives back part of what you paid, so only the difference is the real cost.
How does this handle comparing over more years than the lease term?
It assumes you lease again with the same terms when each lease ends, paying the due-at-signing amount and fees for every new lease. For example, 6 years with 36-month leases means two leases.
What are excess mileage charges?
Leases include a yearly mileage allowance, often 10,000–15,000 miles. Each extra mile is charged at the end, commonly $0.15–$0.30 per mile. Driving 15,000 miles a year on a 12,000-mile lease at $0.25 adds $750 per year.
How fast do cars depreciate?
Many new cars lose roughly 15–20% of their value in the first year and around half within five years, though rates vary widely by model and market. Enter a yearly rate that matches the car you are considering.
When does leasing make sense?
Leasing can suit drivers who want a new car every few years, drive fewer miles than the allowance, want lower monthly payments, or can deduct lease payments for business. Buying usually wins if you keep cars a long time or drive a lot.
Does this include insurance and fuel?
No. Fuel, insurance and routine maintenance are usually similar for leasing and buying the same car, so they are left out to focus on the difference. Lease insurance requirements can be slightly higher.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.