Lease vs Buy Calculator
Compare the true cost of leasing against financing the same car.
Please note: Estimates for planning only. Real fuel economy, depreciation, insurance and lease terms vary widely by vehicle, region and driving style. Confirm figures against a dealer quote or your own records before relying on them.
What the Lease vs Buy Calculator does
Leasing and buying are compared properly by net cost: cash paid out, minus whatever value you still hold at the end. A lease leaves nothing behind, so its cash out is its true cost; buying leaves an asset whose value offsets the payments made.
Formula
Buy net cost = Down + Payments made − (Resale value − Loan balance)Lease net cost = Lease down + Payments madeEquity = Resale value − Loan balance
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Vehicle price | selected currency | Yes | Accepts more than 0. |
| Years to compare | number | Yes | Accepts 1 or more, up to 10. |
| Lease: cash down | selected currency | Optional | Accepts 0 or more. |
| Lease: monthly payment | selected currency | Yes | Accepts more than 0. |
| Buy: down payment | selected currency | Optional | Accepts 0 or more. |
| Buy: loan APR | % | Yes | — |
| Buy: loan term | months | Yes | Accepts 1 or more. |
| Annual depreciation after year one | % | Yes | — |
| First year depreciation | % | Yes | — |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Currency.
- Enter Vehicle price, Years to compare, Lease: monthly payment and Buy: loan APR and 3 more.
- Optionally add Lease: cash down and Buy: down payment.
- Select Calculate.
Worked example
A $35,000 car over 3 years: lease at $452/month with $2,000 down, or finance $30,000 at 6% over 60 months with $5,000 down.
- Price
- $35,000
- Years
- 3
- Lease
- $452
- Buy APR
- 6%
- Term
- 60
Buying pays out $25,879 and retains $7,144 of equity — a net $18,736 against the lease’s $18,272. Over three years leasing edges it by $464; hold the car longer and buying pulls ahead.
Reading the result
- Equity is what makes the two net-cost figures comparable in the first place — a lease's cash-out already is its net cost because it leaves nothing behind, while buying's cash-out only becomes a fair comparison once the car's remaining value is subtracted back out.
- The winner changes with how long you keep the car, which the "years to compare" table shows directly — a result run at 3 years can flip by year 5, so the single headline answer is only valid for the horizon it was run at.
Assumptions and limitations
- Resale value follows the entered depreciation curve exactly at the end of the comparison period — real resale value also depends on condition, mileage and market demand, not age alone.
- Sales tax, registration and insurance differences between leasing and buying are not modelled — insurance in particular is often cheaper on an owned, paid-off car than a leased one, which this does not capture.
Common mistakes
- Comparing the two options by monthly payment alone. A lower lease payment looks cheaper every month, but it ignores the equity a buyer keeps building — net cost, not payment, is the number that accounts for that.
- Reading a short-horizon result as the general answer. Leasing usually looks better in the first year or two; the notes and table above both show buying typically closing the gap the longer the car is kept.
Frequently asked questions
When does leasing actually win?
Over short holding periods, on cars that depreciate hard, or when you want a new vehicle every three years. The longer you keep a car, the more buying pulls ahead.
What is negative equity?
When the loan balance exceeds the car’s value. It is common in the first year or two of a long loan with little money down, and it traps you until the gap closes.