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Car Lease vs. Buy Calculator

Use this Car Lease vs. Buy Calculator guide to compare lease cost, loan cost, equity, mileage, and fees before choosing your next car.

Instant results Private — runs in your browser Updated October 2026

Inputs

Vehicle price

Down / drive-off

Lease monthly payment

Lease term (months)

Residual value (at lease end)

Buy: loan rate

Buy: loan term (months)

Years to keep car1–50 years

Buying wins

$8,645.62

Net buy $31,544.38 vs lease $40,190.00

Lease cycles needed

2 (2 full)

A lease ends at term — keeping the car longer means signing again.

Lease payments

$32,400.00

$450.00 × 72 months

Lease drive-off + fees

$7,790.00

2 × ($3,000.00 drive-off + $895.00 acquisition fee)

Buy monthly payment

$701.33

Paid for 60 of 72 months

Buy total outlay

$45,079.69

Down payment + loan payments only

Estimated resale value

$13,535.31

Residual 58% at 36 mo, then 15%/yr for 3.0 more years

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).

The Car Lease vs. Buy Calculator helps you compare the real cost of leasing a car versus buying the same car with an auto loan. It is useful if a lease has a lower monthly payment but you want to know whether ownership, resale value, mileage, fees, and interest change the final answer.

This page explains the inputs, formulas, and tradeoffs behind the calculator. You will see how cap cost, residual value, money factor, down payment, loan APR, loan term, sales tax, expected market value, and annual mileage affect the lease-or-buy decision.

Use this page with Calcavio’s Auto Loan Calculator, Auto Depreciation Calculator, Car Affordability Calculator, and the Auto & Vehicle Calculators hub when you want a fuller view of vehicle cost.

Auto & Vehicle Calculators

What is a Car Lease vs. Buy Calculator?

A Car Lease vs. Buy Calculator is a decision tool that estimates whether leasing or buying a vehicle costs less over the same comparison period. It compares lease payments and fees against loan payments, interest, equity, and resale value so you can judge the total cost, not just the monthly payment.

Leasing means you pay for the vehicle’s expected depreciation during the lease term, plus a finance charge and fees. Buying means you finance the vehicle, build equity as the loan balance falls, and may recover value when you sell or trade in the car.

This matters because the cheaper monthly option is not always the cheaper total option. A lease can look attractive at $499 per month, but excess mileage, disposition fees, and no ownership at the end may change the result.

Key terms to know before comparing lease vs. buy

Purchase price: The negotiated price of the car before taxes, fees, rebates, or trade-in value.
Capitalized cost: The lease version of the vehicle price. A lower cap cost reduces the depreciation portion of the lease payment.
Residual value: The estimated value of the car at the end of the lease. A higher residual value usually lowers the lease payment.
Money factor: The lease finance rate. NerdWallet explains that you can estimate an APR by multiplying the money factor by 2,400.
Loan APR: The annual interest rate on the auto loan. A higher APR increases the buy-side monthly payment and total interest.
Lease term: The number of months you lease the car, often 24, 36, or 48 months.
Loan term: The number of months you repay the car loan, often 48 to 84 months.
Due at signing: Cash paid at lease start, often including the first payment, acquisition fee, title, registration, and any cap-cost reduction.
Down payment: Cash paid toward a purchase loan. It lowers the financed balance but ties up cash in a depreciating asset.
Mileage allowance: The number of miles included in the lease, often 10,000 to 15,000 miles per year.
Disposition fee: A fee sometimes charged when you return a leased car instead of buying it.
Market value: The expected resale or trade-in value of the car at the end of the comparison period.

Experian data summarized by LendingTree

According to Experian data summarized by LendingTree, the average new-vehicle loan amount in Q1 2026 was $43,925, while the average used-vehicle loan amount was $27,070. That makes lease-vs-buy math important because small APR, mileage, and resale assumptions can move the result by thousands of dollars.

How to use this calculator

Enter the vehicle price.
Use the negotiated price, not the sticker price, if you already have a quote.
Add lease details.
Enter the lease term, residual value, money factor or lease APR, down payment, taxes, fees, and mileage allowance.
Add buy details.
Enter the loan APR, loan term, down payment, taxes, fees, and expected resale value after the comparison period.
Match the time period.
Compare both options over the same number of months, such as 36 months.
Include mileage and turn-in costs.
Add excess-mile charges, disposition fees, and likely wear-and-tear charges when they apply.
Review the net cost.
The calculator should show monthly cost, total cash paid, equity or resale value, and the lease-vs-buy difference.

For example, if a $42,000 car has a 36-month lease at $499 per month with $2,500 due at signing, your visible lease cash cost starts near $20,464 before taxes, mileage, and turn-in adjustments.

Car lease vs. buy formula

The calculator compares two net-cost formulas: one for leasing and one for buying. Exact dealer contracts vary, but the structure below shows the decision clearly.

Lease net cost:

Lease net cost = due at signing + total lease payments + lease taxes + lease fees + excess mileage + wear charges + disposition fee

Buy net cost over the same period:

Buy net cost = down payment + loan payments made + purchase taxes + purchase fees − market value/equity at the end

If you want to estimate a lease payment manually, use this simplified lease structure:

Monthly depreciation = (capitalized cost − residual value) ÷ lease term

Monthly finance charge = (capitalized cost + residual value) × money factor

Base lease payment = monthly depreciation + monthly finance charge

Example formula breakdown:

A car has a $42,000 capitalized cost, a 60% residual after 36 months, and a 0.00200 money factor.

Residual value = $42,000 × 60% = $25,200

Monthly depreciation = ($42,000 − $25,200) ÷ 36 = $466.67

Monthly finance charge = ($42,000 + $25,200) × 0.00200 = $134.40

Base lease payment = $466.67 + $134.40 = $601.07

Before tax and fees, the estimated lease payment is $601.07 per month. Check it yourself with the calculator above - no formula needed.

Real examples: lease vs. buy scenarios

Example 1 - New commuter sedan for three years

Question

A driver is comparing a 36-month lease with buying a $42,000 new sedan. The lease requires $2,500 due at signing and $499 per month. Buying requires $4,000 down, a 60-month loan at 6.8% APR, and the car is expected to be worth $26,000 after three years.

Solution

Lease side:

Lease payments = $499 × 36 = $17,964

Lease cash cost = $2,500 + $17,964 = $20,464

Less refundable/unused adjustment assumed = $0

Estimated disposition fee = $400

Lease net cost = $20,464 + $400 = $20,864

Buy side:

Loan amount: 
$42,000 − $4,000 = $38,000
===========================
Estimated 60-month payment at 6.8% APR: 
Monthly rate = 0.068 ÷ 12 = 0.005667

Payment ≈ $749.08
===========================
Payments made in 36 months:
$749.08 × 36 = $26,966.88
===========================
Loan balance after 36 months is about $16,440
===========================
Equity at sale:
$26,000 − $16,440 = $9,560
===========================
Buy net cost:
$4,000 + $26,966.88 − $9,560 = $21,406.88

Answer

Leasing costs about $20,864, while buying costs about $21,407 over three years. In this short ownership window, leasing is about $543 cheaper, assuming no excess miles or damage. Check it yourself with the calculator above - no formula needed.

Example 2 - High-mileage driver with lease penalties

Question

A rideshare-style commuter expects to drive 18,000 miles per year. The lease allows 12,000 miles per year and charges $0.25 per excess mile. The 36-month lease costs $390 per month with $3,000 due at signing. Buying the same $31,000 car requires $3,000 down, a 60-month loan at 7.2% APR, and the car may be worth $16,500 after three years.

Solution

Lease side:
Included miles = 12,000 × 3 = 36,000
Actual miles = 18,000 × 3 = 54,000
Excess miles = 54,000 − 36,000 = 18,000
Mileage charge = 18,000 × $0.25 = $4,500
Lease payments = $390 × 36 = $14,040
Lease net cost = $3,000 + $14,040 + $4,500 + $400 disposition fee = $21,940
===========================

Buy side:
Loan amount = $31,000 − $3,000 = $28,000

===========================

Estimated payment at 7.2% APR for 60 months:
Payment ≈ $556.97
36 payments = $556.97 × 36 = $20,050.92

===========================

Estimated loan balance after 36 months:
≈ $11,978

===========================

Equity at sale:
$16,500 − $11,978 = $4,522

===========================

Buy net cost:
$3,000 + $20,050.92 − $4,522 = $18,528.92

Answer

Buying costs about $18,529, while leasing costs about $21,940. The lease looks cheaper monthly, but the high-mileage penalty makes buying about $3,411 cheaper. Check it yourself with the calculator above - no formula needed.

Example 3 - Luxury SUV with strong residual value

Question

A shopper wants a $68,000 luxury SUV for only three years. A lease quote is $799 per month with $5,000 due at signing, a 62% residual value, and no expected mileage penalty. Buying requires $8,000 down, a 72-month loan at 7.5% APR, and the SUV may be worth $42,000 after three years.

Solution

Lease side:
Lease payments = $799 × 36 = $28,764
Lease net cost = $5,000 + $28,764 + $500 estimated turn-in costs = $34,264
===========================

Buy side:
Loan amount = $68,000 − $8,000 = $60,000

===========================

Estimated 72-month payment at 7.5% APR:
Payment ≈ $1,037.01
36 payments = $1,037.01 × 36 = $37,332.36

===========================

Estimated loan balance after 36 months:
≈ $33,045

===========================

Equity at sale:
$42,000 − $33,045 = $8,955

===========================

Buy net cost:
$8,000 + $37,332.36 − $8,955 = $36,377.36

Answer

Leasing costs about $34,264, while buying costs about $36,377 for the same three-year window. Leasing is about $2,113 cheaper, mainly because the luxury SUV has a strong residual value and the buyer sells before the loan is paid down much. Check it yourself with the calculator above - no formula needed.

Example 4 - Keep-it-longer buyer after the loan ends

Question

A practical buyer is choosing between leasing a $35,000 crossover repeatedly or buying it and keeping it for seven years. The lease is $430 per month with $3,000 due at signing for 36 months. Buying uses $3,500 down and a 60-month loan at 6.5% APR. The car may be worth $11,000 after seven years.

Solution

Lease side for seven years:

To cover 84 months, assume two 36-month leases plus 12 months of another lease pattern.

Monthly lease cost = $430
Lease payments for 84 months = $430 × 84 = $36,120

===========================

Due-at-signing cost repeats about every 36 months:

Estimated due-at-signing cost = $3,000 + $3,000 + $1,000 prorated = $7,000
Estimated lease net cost = $36,120 + $7,000 + $800 turn-in fees = $43,920

===========================

Buy side:
Loan amount = $35,000 − $3,500 = $31,500

===========================

Estimated 60-month payment at 6.5% APR:
Payment ≈ $616.30
Total loan payments = $616.30 × 60 = $36,978
Buy net cost after 84 months = $3,500 + $36,978 − $11,000 = $29,478

Answer

Buying costs about $29,478 over seven years, while leasing repeatedly costs about $43,920. Buying is about $14,442 cheaper if the driver keeps the car well after the loan ends. Check it yourself with the calculator above - no formula needed.

Example 5 - EV lease with a lower payment but uncertain resale

Question

An EV shopper compares a $49,000 electric crossover. A 36-month lease is $459 per month with $4,000 due at signing. Buying requires $5,000 down, a 60-month loan at 6.9% APR, and a cautious resale estimate of $27,000 after three years.

Solution

Lease side:

Lease payments = $459 × 36 = $16,524
Lease net cost = $4,000 + $16,524 + $400 disposition fee = $20,924

===========================

Buy side:

Loan amount = $49,000 − $5,000 = $44,000

===========================

Estimated 60-month payment at 6.9% APR:

Payment ≈ $869.42
36 payments = $869.42 × 36 = $31,299.12

===========================

Estimated loan balance after 36 months:

≈ $18,950

===========================

Equity at sale:

$27,000 − $18,950 = $8,050


===========================

Buy net cost:

$5,000 + $31,299.12 − $8,050 = $28,249.12

Answer

Leasing costs about $20,924, while buying costs about $28,249 over three years. The lease is about $7,325 cheaper in this short EV scenario, mainly because the buyer carries resale risk while the lease shifts much of that risk to the lessor. Check it yourself with the calculator above - no formula needed.

What’s new here: this page compares five different decision patterns - short-term commuter, high-mileage driver, luxury SUV, long-term owner, and EV resale-risk case - instead of repeating one generic lease example.

Lease vs. buy comparison table

Use this quick table when the calculator result is close. The “winner” often depends less on the headline payment and more on your behavior after month 36.

Situation	Leasing tends to fit	Buying tends to fit	Main risk
You replace cars every 2-3 years	Yes	Sometimes	Fees and mileage limits
You drive over 15,000 miles/year	Rarely	Yes	Lease excess-mile charges
You want the lowest monthly payment	Often	Sometimes	No equity at lease end
You keep cars 6-10 years	Rarely	Yes	Repairs after warranty
You want customization	No	Yes	Lower resale if modified
You worry about resale value	Often	Sometimes	Lease pricing may already include it

Comparison

Lease vs. buy verdict:

Leasing can be cheaper for short, predictable, low-mileage use. Buying can be cheaper when you drive more, keep the car longer, or want equity after the loan. If the calculator difference is small, choose based on mileage, flexibility, and how long you truly keep cars.

Pros/Cons - Leasing

Pros and cons

Pros

Lower monthly payment in many short-term comparisons.
Newer vehicle more often.
Warranty coverage may cover much of the lease term.
Less direct resale-value risk.

Cons

No ownership at the end unless you buy out the lease.
Mileage limits can be expensive.
Turn-in, acquisition, and disposition fees add up.
Customization is limited.

Pros/Cons - Buying

Pros and cons

Pros

You can build equity.
No lease mileage cap.
Long-term ownership can lower annual cost.
You can sell, trade, or modify the car.

Cons

Higher monthly payment in many cases.
You carry depreciation and resale risk.
Repairs can rise after warranty.
More cash may be tied up in the vehicle.

Frequently asked questions

Is it cheaper to lease or buy a car?+

Leasing is often cheaper month to month, while buying is often cheaper if you keep the car after the loan ends. For example, a $430 monthly lease may beat a $616 loan payment at first, but buying can win over seven years once loan payments stop and the car still has resale value.

How does a car lease payment work?+

A lease payment mainly covers depreciation plus a finance charge. First, subtract the residual value from the capitalized cost and divide by the lease term. Then add the finance charge, usually calculated with a money factor. Taxes and fees can raise the final monthly payment.

What is a money factor in a car lease?+

A money factor is the lease’s finance-rate input. To estimate an equivalent APR, multiply the money factor by 2,400. For example, a 0.00200 money factor is roughly 4.8% APR because 0.00200 × 2,400 = 4.8.

How many miles make leasing a bad idea?+

Leasing becomes risky when your expected driving exceeds the mileage allowance. If a lease includes 12,000 miles per year and you drive 18,000, a three-year lease creates 18,000 excess miles. At $0.25 per mile, that adds $4,500 before other turn-in costs.

Is it smart to lease a car and then buy it?+

It can work if the buyout price is lower than the car’s market value or if buying avoids large mileage and damage charges. However, leasing with the plan to buy is not automatically cheaper. Compare total lease payments, buyout price, fees, taxes, and available used-car loan rates.

Why does buying look expensive in the first three years?+

Buying often looks expensive early because auto loans amortize slowly. In the first few years, you pay interest and principal while the car depreciates. The buy side improves when you keep the car longer, because payments eventually end but the car may still have usable value.

Should I compare lease vs. buy using monthly payment or total cost?+

Use total cost first, then check monthly affordability. Monthly payment shows cash-flow pressure, but total cost captures down payment, taxes, interest, mileage fees, resale value, and equity. A lease can have a lower payment and still lose if mileage fees or repeated leases pile up.

Author, disclaimer, and sources

Written by

Nathan Cole

Mortgage & Consumer Lending Writer · Consumer Lending

Former Mortgage Loan Officer

Nathan spent more than a decade on the lending side - first as a mortgage loan officer, later helping borrowers untangle auto and personal loans. He writes about monthly payments, APR, refinancing, and debt payoff in plain English, translating the fine print lenders gloss over. His focus is simple: show the true cost of borrowing before you sign, not after.

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Reviewed by

Daniel Okafor

Tax & Personal Finance Writer · Tax-preparation background

Personal-Finance Journalism

Daniel breaks down income tax, take-home pay, budgeting, and saving without the jargon. After years preparing returns and writing about household money, he's fluent in brackets, deductions, and the difference between marginal and effective rates. He pins every tax figure to the current IRS year and flags exactly what changes from one filing season to the next, so readers aren't caught out by stale numbers.

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— Calcavio provides educational tools and general information, not financial, investment, tax, or legal advice. Calculations are estimates and may not reflect your full situation. Vehicle prices, rates, taxes, fees, incentives, and residual values can change. Consult a qualified professional before making decisions.