Car Lease vs. Buy Calculator

Compare total cost over the same number of months

A lease advertises a monthly payment, while a purchase produces an asset and a remaining loan balance. Comparing monthly payments alone ignores both buyer equity and lease-end charges.

This calculator uses the lease term as the common horizon. The purchase side includes down payment, loan payments made during that horizon, and estimated maintenance. It subtracts buyer equity:

buyer equity = estimated vehicle value − remaining auto loan

buy net cost = purchase cash outlay − buyer equity

The lease side includes cash due at signing, all scheduled lease payments, and the disposition fee.

Worked example

Use a $40,000 vehicle, $4,000 purchase down payment, 6.5% APR, and a five-year loan. Compare a 36-month lease with $3,000 due at signing, $480 monthly payments, and a $395 disposition fee. Assume 15% annual depreciation and $500 annual maintenance for the buyer.

The purchase payment is higher because the loan finances ownership. After 36 months, the buyer still owes part of the loan but also owns a vehicle with modeled value. The calculator subtracts the loan from that value before comparing costs.

Change depreciation first. Resale value is often the largest uncertainty. A model that retains value better can favor buying; unexpectedly rapid depreciation can reduce buyer equity.

Add the costs unique to your offers

The FTC recommends comparing total cost rather than advertised payment. Obtain an out-the-door purchase price and a written lease disclosure. Review:

• acquisition and documentation fees;
• sales or use tax;
• mileage allowance and excess-mile charge;
• wear-and-tear standards;
• disposition and purchase-option fees;
• required maintenance;
• insurance coverage differences; and
• incentives that apply only to one path.

If expected lease-end charges are material, add them to due-at-signing or disposition assumptions. If taxes are included in the quoted monthly lease payment, do not add them twice.

Ownership provides options and risks

A buyer can keep the vehicle after the loan, sell it, trade it, drive without a contractual mileage cap, or face repair costs after warranty coverage. A lessee can return the vehicle at the end but generally owns no equity, must follow mileage and condition rules, and may face charges for early termination.

Use the car loan calculator to build a purchase quote with tax and trade-in. Then return here with the actual payment and realistic future-value scenarios.

Model limitations

The model assumes a fixed auto loan, monthly amortization, constant annual depreciation, and no purchase transaction costs beyond the entered down payment. It excludes taxes, acquisition fees, insurance, repairs beyond the maintenance estimate, rebates, mileage penalties, excess wear, lease rent charge detail, and purchase-option tax. It is an educational cost comparison, not a valuation or dealer quote.