Car Lease vs Buy Calculator
Decide whether to lease or buy with confidence. Compare total 5-year cost of leasing vs financing, including depreciation, interest, fees, and residual value.
Buy / Finance
Lease
How to use Car Lease vs Buy Calculator
The lease vs buy calculator compares the true 5-year total cost of leasing against financing a vehicle purchase. It factors in all costs — payments, down payment, insurance difference, disposition fee, equity or depreciation — to show which option costs less over your chosen horizon and by how much.
- Enter the vehicle price and your down payment.
- Add loan details (APR, term) for the buy scenario.
- Add lease details (cap cost, residual, money factor, term) for the lease scenario.
- Set years to compare and annual mileage.
- Review total 5-year cost for each path and the break-even point.
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Why leasing usually costs more long-term
Leasing has lower monthly payments but no equity at the end — you pay for depreciation without building ownership. Buying costs more monthly but creates an asset. After 5–7 years of ownership (with the loan paid off), your cost-per-mile plummets. Leasing perpetually means always having a payment; buying eventually means payment-free driving.
| Cost element | Lease (two 3-yr leases) | Buy (60-mo finance) |
|---|---|---|
| Monthly payment | ~$450–500 | ~$650–700 |
| Down payment total | ~$2,000 | ~$5,000 |
| Total payments | ~$32,400 | ~$39,000 |
| Residual / car value | $0 (returned) | ~$18,000 |
| Net 5-yr cost | ~$34,400 | ~$26,000 |
When leasing makes financial sense
Leasing can make sense when: the money factor is manufacturer-subsidised and very low; you drive under the allowed mileage; you consistently want the latest technology; you're a business owner who can deduct payments; or you dislike maintenance risk on older vehicles. Always compare the net cost (including residual equity) — not just the monthly payment.
Glossary
- Residual equity
- The car's market value at the end of ownership, reducing the net cost of buying.
- Disposition fee
- Fee charged at lease-end when returning a car (~$200–500).
- Total cost of ownership
- All costs over a period: payments, insurance, fuel, maintenance, depreciation.
- Break-even point
- The year when cumulative buying costs fall below cumulative leasing costs.
Related reading
Frequently Asked Questions
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Why use Car Lease vs Buy Calculator?
- Covers all major auto loan and leasing calculations
- Fuel cost comparisons with real MPG/L/100km data
- Instant results with no spreadsheet required
- Supports both metric and imperial units
Common use cases
- Calculate monthly payments on a car loan
- Compare the total cost of owning vs leasing
- Estimate annual fuel costs for a vehicle
- Calculate depreciation over 5 years
- Find out true cost of ownership including insurance
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