Car Lease vs Buy Calculator
Compare the true cost of leasing versus financing the same car over the same period — including the equity you keep when you buy.
How it works
Lease cost = drive-off + monthly × months · Buy cost = down + payments made + remaining loan balance − resale value
A fair comparison charges each option over the same period and credits buying for the equity you keep. Leasing is pure expense — every payment is gone and the car goes back. Buying costs the down payment plus the payments made, but at the end you own a car worth its resale value, which is subtracted from the cost. Leasing often shows lower cash outflow, yet buying leaves you with an asset, so the "cheaper" option depends on how much that resale value is.
Worked example
Leasing at $400/mo with $2,000 down for 36 months costs $16,400. Buying a $35,000 car with $3,000 down at 7% over 60 months is about $634/mo; after 36 months you have paid ~$22,800 plus down, still owe ~$14,200, but the car is worth $20,000 — a net cost near $20,000. Here leasing costs less cash, but buying leaves you with a paid-down car.
Frequently asked questions
Is leasing or buying cheaper?
Leasing usually has lower monthly payments and cash outflow, but you own nothing at the end. Buying costs more up front yet builds equity — over a full ownership cycle (keeping the car years after the loan ends) buying is typically cheaper per year of use.
Why subtract the resale value when buying?
When you buy, the car is still worth something at the end of the comparison period — that value offsets what you spent. Ignoring it would unfairly make buying look far more expensive than leasing, where you hand the car back and keep nothing.
What if I keep leasing forever?
Perpetual leasing means a permanent payment with no equity ever built, which is generally the most expensive way to drive over a lifetime. Leasing makes the most sense if you value always driving a newer car and predictable costs over ownership.
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Educational estimate only — real costs vary by lender, insurer, location and driving habits. Not financial advice.