Lease vs Buy Car Calculator
Compare the true cost of leasing and buying the same car over the same period, counting the value you still own when you buy.
Lease total
$3,000 at signing + 36 × $552. You own nothing at the end.
Buy net cost
$5,000 down + $25,118 in payments − $5,267 equity (car worth ~$20,930, loan left $15,663).
Difference: $1,989 in favour of leasing, before insurance and maintenance.
The depreciation fee is (price − residual) ÷ 36 months: you pay for the value the car loses while you have it. The rent charge is the lease's interest, charged on (price + residual) × money factor. Raise the residual and the depreciation part shrinks. That's why cars that hold their value lease cheaply.
Lease or buy: how to decide
The comparison above looks only at the lease term. Buying tends to pull ahead the longer you keep the car, because after the loan is paid off you drive for just running costs while the car keeps some value.
- Lean lease if you want a new car every 2–3 years, drive under your lease's mileage allowance (often 10,000–12,000 a year), or the maker is advertising a subsidised lease.
- Lean buy if you keep cars 6+ years, drive a lot, or like to modify your car.
- EVs are a special case: leases can pass through incentives and protect you from fast EV depreciation.
Ask the dealer for the capitalised cost, residual and money factor in writing, then enter them here.
Get a plain-English read of your numbers, or ask anything about depreciation, when to sell or lease vs buy. Nothing is sent until you press Ask.
Questions people ask
Is it better to lease or buy a car?
Buying usually costs less over the long run, especially if you keep the car well past the loan, because you stop paying once the loan ends and the car still has value. Leasing can win if you want a new car every 2–3 years, drive few miles, or the maker subsidises the lease with a high residual or low money factor.
How is a lease payment calculated?
Monthly payment = depreciation fee + rent charge. Depreciation fee = (capitalised cost − residual value) ÷ months. Rent charge = (capitalised cost + residual value) × money factor. Sales tax is then added in most US states. Multiply the money factor by 2,400 to get the approximate APR.
What does depreciation have to do with leasing?
A lease is basically paying for the depreciation you use plus interest. Models that hold value well get high residuals and therefore lower payments, which is why the same price car can lease for very different amounts.
What costs does this comparison include?
For leasing: money due at signing and all monthly payments. For buying: down payment and loan payments over the same period, minus the equity you keep (estimated car value minus the loan balance left). It leaves out insurance, maintenance and fees that are similar either way, and lease excess-mileage charges.