Lease vs Buy Car Calculator
Compare the total cost of leasing versus buying a car.
Leasing vs buying: what's the real difference?
When you buy a car, you take on a loan (or pay cash), build equity in the vehicle, and keep an asset you can sell or trade in later. When you lease, you're essentially paying for the car's depreciation over the lease term plus interest, with lower monthly payments but nothing to show for it at the end unless you buy out the lease.
How to compare the true cost
The fairest comparison isn't just monthly payment — it's net cost. For buying, that means your total payments minus what the car is worth when you're done (its resale value). For leasing, it's simply your total payments, since you don't own anything afterward. This calculator does that math for you.
Leasing often makes sense if you like driving a new car every few years and want predictable costs with no resale hassle. Buying often wins financially if you plan to keep the car a long time past the loan term, since you stop making payments but keep driving a paid-off vehicle.
Frequently Asked Questions
Is it cheaper to lease or buy a car?
It depends on how long you plan to keep the car. Leasing usually has lower monthly payments but leaves you with nothing at the end. Buying costs more upfront but builds equity — if you keep the car well past the loan term, buying is usually cheaper long-term.
What happens at the end of a car lease?
You typically return the car, walk away, and start a new lease, or you can buy the car at its predetermined residual value if you want to keep it.
Do you build equity when leasing a car?
No — lease payments cover the car's depreciation and interest, but you don't own any part of the vehicle unless you buy it out at lease end.
Are there mileage limits with leasing?
Yes, most leases include an annual mileage allowance (often 10,000-15,000 miles), with per-mile penalty fees if you exceed it — something to factor in if you drive a lot.
Why do businesses often lease vehicles?
Leasing can offer tax advantages for businesses, lower upfront cash outlay, and the ability to regularly upgrade to newer vehicles — consult a tax professional for specifics on your situation.
How accurate is this lease vs buy comparison?
This is an estimate based on the numbers you enter. Actual lease offers, loan rates, and resale values vary — get real quotes from dealers and lenders for a precise comparison.