Auto Lease vs. Buy Calculator

Deciding whether to lease or buy a car is one of the most common — and most misunderstood — financial choices drivers face. The two options work very differently, and the lower monthly payment of a lease can disguise the fact that buying often costs less in the long run because you end up owning an asset.

When you buy with financing, your payments go toward owning the car outright. They're usually higher than lease payments because you're paying off the entire value of the vehicle, not just its depreciation. But once the loan is paid off, you own a car with real resale value and can drive it for years with no payment at all. Buying suits people who keep cars a long time and drive a lot of miles.

When you lease, you're essentially renting the car for a set term, paying mainly for the depreciation that occurs while you drive it, plus interest (the "money factor") and fees. Monthly payments are lower, and you get a new car every few years under warranty, but you build no equity and have nothing to show at the end except the option to buy it at its residual value or walk away. Leases also impose mileage limits — commonly 10,000 to 15,000 miles a year — with steep per-mile penalties for going over, and charges for excess wear.

The honest comparison isn't monthly payment versus monthly payment; it's total net cost over the same period. For buying, that's your down payment plus all loan payments minus the car's resale value at the end. For leasing, it's the lease down payment plus all lease payments, with nothing recovered at the end. When you account for the resale value you keep by buying, the gap often narrows or reverses despite the higher monthly payment.

Leasing can still make sense if you value driving a new, warrantied car every few years, want lower payments, or use the vehicle for business. Buying tends to win for long-term ownership and high-mileage drivers. This calculator puts both on equal footing so you can compare the real cost rather than the marketing.