Lease vs. Buy Car Calculator: Which Costs Less Over Time?
Enter the car's price, the lease terms, the loan terms, and how many years you'll actually drive it. The calculator totals each path over that horizon, credits the buy side for the car you'd still own, and calls the winner.
The same car on both paths
Your real horizon, not the loan or lease term
Share of the price the car is worth when you'd sell
Leasing for 6 years
$39,400
about $547/month all-in, with nothing owned at the end
Buying for 6 years
$24,993
$40,743 out of pocket minus a $15,750 car to sell
Verdict
Buying wins by $14,407
over your horizon, before insurance and upkeep
Where the money goes
| Lease | Buy | |
|---|---|---|
| Upfront today | $3,500 | $4,000 |
| Monthly payment | $450 | $612 for 60 mo |
| All payments over 6 years | $39,400 | $40,743 |
| Asset at the end | $0 | $15,750 |
| Net cost | $39,400 | $24,993 |
The lease side assumes back-to-back leases on similar terms, so the signing costs and fees repeat each cycle and are spread per month. Insurance, fuel, maintenance, and mileage-overage charges are excluded; they differ by situation and usually favor whichever car is newer.
Same car, two cash flows
Leasing prices the slice of the car you use: the payment covers expected depreciation over the term plus a financing charge, and at turn-in you hand the keys back and start again. Buying prices the whole car: a down payment, then amortized loan payments (each covering that month's interest first, principal second) until the loan ends and the payment disappears. The honest comparison runs both over your real horizon and nets out what you own at the end: lease cost equals the per-month cost of a full cycle times your months, while net buy cost equals down payment plus payments plus any loan balance still owed, minus the car's resale value.
Numbers make the shape obvious
Take a $35,000 car over six years. Leasing at $450 a month with $2,500 due at signing and $1,000 in fees per 36-month cycle works out to about $547 a month all-in, roughly $39,400 over the six years, with nothing to show at the end. Buying with $4,000 down and a 60-month loan at 6.9% runs about $612 a month, higher than the lease payment, but the payments stop after year five, and a car worth 45% of its price returns $15,750 at sale. Net cost: about $25,000. Buying comes out roughly $14,400 ahead, and the gap widens every year you keep driving.
Equity and mileage are the real differences
The lease payment is smaller because it buys nothing durable: there is no equity, and the cycle never ends. Buying builds equity even while the loan runs, since an auto loan is secured debt paid against an asset you keep. Mileage runs the other way: leases cap miles, typically 10,000-15,000 a year, and charge per mile beyond them, while an owned car's extra miles cost only depreciation. High-mileage drivers lease at a structural disadvantage. Leasing earns its keep for short horizons, always-new preferences, or when a warranty-covered car matters more than cost.
Decide the budget before the structure
Either way, the car has to fit your finances. The car affordability calculator sizes the all-in monthly cost you can carry, the auto loan calculator prices the buy side with tax and trade-in included, and a perpetual car payment is a textbook case of lifestyle creep: it arrives with a raise and quietly never leaves.
Frequently asked questions
Is it cheaper to lease or buy a car?
Over short horizons of two or three years, leasing often costs less out of pocket because you only pay for the steepest slice of depreciation plus fees. Over longer horizons, buying usually wins: loan payments eventually stop, while lease payments repeat forever, and the owned car is still worth something when you sell.
How does this calculator make the comparison fair?
Both paths cover the same car over the same number of years. The lease side assumes back-to-back leases on similar terms, spreading the signing costs and fees across every month. The buy side adds the down payment and loan payments, then credits the car's estimated resale value at the end, since that money comes back to you.
What are mileage caps on a lease?
Most leases allow 10,000 to 15,000 miles per year. Driving past the cap typically costs 15 to 30 cents per mile at turn-in, so 5,000 extra miles can add $750-1,500. If you drive a lot, price the overage into the lease or negotiate a higher-mileage contract before signing.
What fees does leasing add beyond the payment?
An acquisition fee at the start (often several hundred dollars), a disposition fee at turn-in, possible charges for wear and tear beyond normal use, and taxes and registration each cycle. They arrive every time you start a new lease, which is why this calculator repeats them per cycle rather than counting them once.
What is a money factor on a lease?
It's the lease world's interest rate in disguise. Multiply the money factor by 2,400 to get the approximate APR: a 0.0025 money factor is about a 6% rate. Comparing that number against auto loan APRs tells you how expensive the lease's financing really is.
Does this calculator save my numbers?
No. Everything runs in your browser and nothing you type is stored or sent anywhere.
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