How to use the Auto Lease vs. Buy Calculator
Enter the car’s price and how many years you want to compare. Under lease details, add the monthly payment, what’s due at signing, the term, the mileage allowance and fees from the lease offer. Under buy details, add your down payment, loan APR and term, and what you expect the car to be worth at the end of the period. The green box tells you which option costs less in total; the cards show each total and monthly payment, and the chart shows how the costs build up over time.
Worked examples
$35,000 car over 3 years
| Lease: $2,000 at signing + 36 × $399 + $400 fee + $1,200 maintenance | $17,964 |
| Buy: $7,000 down, 6.5% APR for 60 months | $548 a month |
| Buy: 36 payments + $12,299 payoff + $2,400 maintenance − $18,000 resale | $23,421 |
| Cheaper over 3 years | Leasing, by $5,457 |
Over 3 years the lease wins here because the buyer is still paying off the loan. Keep the car longer, or assume a higher resale value, and buying often comes out ahead.
Check: a $12,000 car bought with a 0% loan over 12 months
| 12 payments of $1,000 | $12,000 |
| Loan balance at the end | $0 |
| Total buy cost (no resale or maintenance counted) | $12,000 |
Assumptions and limits
- Insurance is assumed to cost about the same either way, so it is not included.
- The lease payment you enter should already include sales tax, as most lease quotes do.
- If you compare over more years than the lease term, the lease is renewed on the same terms.
- Resale value is your own estimate. It has the biggest effect on the result, so try a few values.
- These are estimates for comparison, not a dealer or lender quote.
Formula
Frequently asked questions
Is leasing or buying cheaper?
It depends on how long you keep the car. Leasing often costs less over 2–3 years, while buying and keeping a car for 6+ years is usually cheapest because you stop making payments and still own something of value.
Why not just compare monthly payments?
A lease payment is usually lower because you only pay for the car’s depreciation during the lease. Comparing the total over the same period, after resale value, shows the real cost.
What are extra-mile charges?
Leases include a yearly mileage allowance, often 10,000–15,000 miles. Every mile over it costs a set fee, commonly $0.15–$0.30, when you return the car.
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Results are estimates for information only and are not financial, tax or legal advice. Tax rules, interest rates and fees change, so confirm important numbers with your bank, employer or a qualified adviser. Read our disclaimer.