Free Car Lease vs. Buy Calculator

How leasing and buying actually compare

Comparing a lease payment to a loan payment directly is misleading, because they buy different things. A lease payment covers depreciation and finance charges for a fixed window. A loan payment covers those too, but leaves you owning an asset at the end. The only fair comparison measures both over the same period and credits buying for whatever the car is still worth.

Why buying looks worse over a short window

Three years is roughly the worst point to evaluate a five-year loan. You've paid substantial interest, the car has absorbed its steepest depreciation, and the loan balance hasn't fallen far enough to leave much equity. Buying tends to win when you extend the window — the loan eventually ends and the payments stop, while a lease simply rolls into another lease.

Try raising the comparison period toward the full loan term and the result usually flips. That's the real question this calculator poses: not which is cheaper in the abstract, but which is cheaper for how long you'd actually keep the car.

The resale value assumption does the heavy lifting

Buying's net cost depends entirely on what the car is worth when you'd sell it, and that's an estimate rather than a fact. Change the resale figure by a few thousand dollars and the comparison can reverse. Models with strong resale reputations favor buying; vehicles that depreciate hard favor leasing, which is partly why lease terms differ so much between models.

It's worth running two or three resale figures — an optimistic one, a pessimistic one, and something in between — rather than trusting a single guess.

What the numbers don't capture

• Mileage limits. Leases cap annual mileage, commonly 10,000–15,000, with per-mile charges beyond it. High-mileage drivers can lose the lease's cost advantage quickly.
• Wear-and-tear charges. Returned leases are inspected, and damage beyond "normal" is billed.
• Warranty coverage. A leased car is typically under factory warranty the whole term. An owned car may face repair bills once the warranty lapses — a real cost this comparison omits.
• Flexibility. You can sell an owned car at any time. Ending a lease early is usually expensive.
• Modifications and use. Leases restrict what you can do to the vehicle.

When each option tends to make sense

Leasing tends to fit predictable, moderate mileage, a preference for a newer car with warranty coverage, and comfort with a permanent payment. Buying tends to fit longer ownership, higher mileage, and the goal of eventually having no car payment at all — which is where most of buying's long-run advantage comes from.

Neither is inherently the smarter financial choice. The answer depends on how long you keep cars and how many miles you drive, both of which you know better than any calculator.

What this calculator doesn't include

It compares cash out of pocket against resale equity over your chosen window. It doesn't model sales tax treatment (which differs between leases and purchases and varies by state), acquisition or disposition fees, mileage overage charges, maintenance differences, insurance differences, or the opportunity cost of a larger down payment. Lease deals also frequently include manufacturer incentives that this straightforward math can't reflect — compare the actual offer in front of you.