What is this?
The Lease vs. Buy Calculator compares the true total cost of leasing versus buying a car over the lease term, including monthly payments, down payment, excess mileage fees, loan interest, and the car's resale value, to identify which option is financially cheaper for your situation.How to use
Enter the car's MSRP, your lease quote (monthly payment, down payment, term), and your buying scenario (down payment, loan APR, loan term). Input your annual mileage and the residual value percentage from your dealer quote. The calculator shows net cost for each option and the savings from choosing the cheaper one.Tips
- Buying is almost always cheaper long-term if you keep the car 7+ years; leasing makes more financial sense if you swap cars every 3 years.
- High-mileage drivers (15,000+ miles/year) should nearly always buy — excess mileage fees erode most of leasing's cost advantage.
- Never put a large down payment on a lease — if the car is totaled, that money is gone with no recovery from insurance.
- Gap insurance is essential when leasing; it covers the difference between what you owe and what your insurer pays after a total loss.
- Negotiate the "money factor" on a lease like an interest rate — dealers often mark it up by 0.001–0.003 (equivalent to 1–2% APR).
- The residual value percentage in your lease quote directly determines your monthly payment — higher residual means lower payments.
- At lease end you can buy the car at the pre-agreed residual price, which is advantageous if market value exceeds that figure.
- Car depreciation is steepest in years 1–3 (25–40% of value lost); leasing lets you use a new car during this high-depreciation window.
Disclaimer: This calculator provides estimates for informational purposes only and does not constitute financial advice. Actual results may vary based on lender terms, market conditions, and individual circumstances. Consult a qualified financial advisor before making financial decisions. See our full disclaimer for details. 