Car Lease vs. Buy Calculator
Compare total cost of leasing vs. buying the same car over the years you plan to keep it.
Inputs
Assumptions: every lease signing — including the first one, not just renewals — carries the $3,000.00 drive-off plus a $895.00 acquisition fee, a standard bank fee charged at the start of every lease. Leasing past the original 36-month term assumes you sign a new lease at the same monthly rate. Resale value at 6 years applies your lease residual at month 36, then 15% additional depreciation per year after that. Buy cost includes only the down payment and loan payments minus resale — insurance, fuel, maintenance, tax and registration are excluded on both sides.
Adjustable defaults: the $895.00 acquisition fee is a typical industry figure (real leases commonly range $500–$1,000 — check your lease contract, and if yours is rolled into the monthly payment, reduce the monthly payment field accordingly); the 15%/year post-lease-term depreciation rate is a typical used-car curve (actual resale depends on make, model, mileage and condition).
How this is calculated
Lease total = (monthly payment × months you keep the car) + (number of lease signings × drive-off) + (number of signings × acquisition fee). If the months you keep the car exceed the lease term, extra cycles are added; a partial final cycle only counts the months actually driven, but still assumes a full drive-off to sign it.
Buy net cost = down payment + (loan payment × the smaller of loan term and months kept) − estimated resale value. Payments stop at loan payoff, so loan-free years add no payments — they only add depreciation, which lowers the resale credit.
Residual value % is a lease figure: the car's assumed worth at the end of the lease term. It is not the value after longer ownership, so for years beyond the lease term we depreciate that residual by 15% per year (a typical used-car curve) to estimate resale.
Not included: insurance, fuel, maintenance and repairs, sales tax, registration, mileage overage penalties, and lease disposition fees. These generally favour leasing early (warranty coverage) and buying later (no payments).
How it works
We compare the total out-of-pocket cost to own (down payment + loan payments minus estimated resale value) against as many consecutive leases as it takes to cover the years you plan to keep the car — each lease carrying its own drive-off and acquisition fee.
Frequently asked questions
When does leasing make sense?
If you want a new car every 2–3 years, drive under typical mileage caps, and don't care about ownership.
When does buying win?
Almost always when you keep the car 6+ years. Owning past payoff is the cheapest way to drive.
Why does the lease cost jump when I keep the car longer than the lease term?
Because a lease ends at term. To keep driving you sign a new lease, which means another drive-off payment and another acquisition fee — not just more monthly payments.
What's a money factor?
It's the lease's interest rate expressed differently — multiply by 2400 to convert to an APR.
Mileage overages?
Typical leases penalize at $0.20–$0.30 per mile over the limit. Cap a planned road trip first.
Can I buy at lease end?
Yes — at the residual value. Sometimes a smart move if the car held value better than expected.
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View all auto & vehicle →Results are estimates for educational purposes only and are not financial advice. Verify with a qualified professional before making decisions.
Last updated January 1970