Compare the total cost of leasing versus buying your next car. Get side-by-side monthly payment comparisons, total cost analysis, and a personalized recommendation to help you decide.
Leasing typically offers lower monthly payments over a shorter term (2-4 years), but you never own the vehicle. Buying has higher monthly payments over a longer term (4-7 years), but once the loan is paid off, you own a valuable asset. The breakeven point typically occurs around year 4-5 of ownership.
Monthly Lease = Depreciation Fee + Finance Fee + Tax
Formula: (Net Cap Cost - Residual) ÷ Lease Term
Net Cap Cost = Car Price - Down Payment - Trade-In + Acquisition Fee
Residual = Car Price × (Residual% / 100)
Formula: (Net Cap Cost + Residual) × Money Factor
Money Factor is the dealer's interest rate expressed differently. Multiply by 2400 to get approximate APR.
Formula: (Depreciation Fee + Finance Fee) × (Sales Tax% / 100) ÷ Lease Term
Some states tax the full car price, others only the monthly payment.
M = P × [r(1+r)^n] ÷ [(1+r)^n - 1]
M = Monthly Payment
P = Loan Amount (Car Price - Down Payment - Trade-In)
r = Monthly Interest Rate (APR ÷ 12)
n = Total Number of Payments (Loan Term in months)
Lease Total Cost: Upfront costs + (Monthly Payment × Lease Term) + Disposition Fee
Buy Total Cost: Down payment + Trade-In + (Monthly Payment × Loan Term) - (Resale Value)
Buy Net Cost: Total loan payments + upfront - estimated resale value
Leasing a car can be the smarter financial choice in several scenarios. If you enjoy driving a new vehicle every 2-3 years with the latest safety features and technology, leasing offers a predictable monthly cost without the long-term commitment of ownership. Leasing also makes sense if you have a limited down payment or prefer lower monthly payments. Business owners often lease because lease payments can be tax-deductible as a business expense. Additionally, if you drive fewer than 12,000-15,000 miles per year and take good care of your vehicles, you avoid the mileage penalties and excessive wear charges that make leasing expensive for others.
Buying a car is typically the better long-term financial decision if you plan to keep the vehicle for 5+ years. Once your auto loan is paid off, you have a paid-off asset with no monthly payment. This is especially powerful if you drive high mileage (more than 15,000 miles/year) since there are no mileage restrictions. Buying also makes sense for those who like to customize their vehicles, modify performance, or keep cars until they're no longer reliable. The ability to sell or trade-in the vehicle at any time provides flexibility that leasing doesn't offer. For families with teenage drivers or those who expect normal wear-and-tear, buying avoids end-of-lease charges for dings, scratches, and worn interiors.
Our lease vs buy car calculator helps you make an informed decision by comparing the total costs of both options. All calculations are performed in your browser — no data is stored or transmitted.
Disclaimer: This calculator provides estimates for educational purposes only. Actual lease and loan terms vary by lender, credit score, location, and market conditions. Taxes, fees, and incentives differ by state and dealership. Consult with automotive finance professionals for personalized advice. This calculator does not account for insurance cost differences, maintenance costs, or the time value of money.