Lease vs Buy Calculator (USA)
Compare the real cost of leasing versus buying a vehicle over the same period, including payments, taxes, fees, maintenance, mileage overage, depreciation, and the equity you may still have if you buy.
Inputs
Vehicle and tax assumptions
Buy scenario
Lease scenario
Usage and running costs
Results
Net cost if leasing
$0
Net cost if buying
$0
Cheaper option
$0
End-of-period equity if buying
$0
| Component | Amount | Note |
|---|
Net cost comparison
See which path is cheaper over the same period after the buy path is adjusted for end-of-period equity.
Vehicle value vs loan balance
This shows the buy path only: how vehicle value may decline and how loan balance may fall over the comparison period.
How to use
- Enter the vehicle price and a reasonable sales tax rate.
- Build the buy path with down payment, APR, loan term, fees, and expected annual depreciation.
- Build the lease path with lease term, money factor, residual, due-at-signing amount, and lease fees.
- Add mileage assumptions honestly. This is where many “cheap” leases stop looking cheap.
- Include annual maintenance and registration costs for both paths so the comparison is not artificially clean.
- Click Calculate to compare total lease cost with total buy cost over the same lease-length period.
If you want a dedicated financing-only view, use the Auto Loan Calculator (USA). If you are also considering a used vehicle instead of a new one, the Used Car Total Cost Calculator (USA) is a good next step.
How the calculation works
Lease-vs-buy decisions are often framed badly. Dealers, friends, and random internet posts usually focus on one thing: the monthly payment. But that is not the real comparison. The real comparison is what leaves your pocket over the same period and what, if anything, you still own when that period ends.
This calculator uses the lease term as the comparison window for both paths. That makes the question practical: if you lease for 36 months, what is the cost of leasing for 36 months versus buying the same vehicle and owning it for 36 months?
For the buy path, the calculator estimates a financed amount using vehicle price, sales tax, loan fees, and the buy down payment. It then calculates the monthly loan payment with the standard amortization formula:
Monthly payment = P × [r(1+r)^n] ÷ [(1+r)^n − 1]
where P is the financed amount, r is the monthly interest rate, and n is the total number of loan payments.
After that, the calculator estimates the vehicle’s value at the end of the comparison period using the annual depreciation assumption, and also estimates the remaining loan balance after the same number of months. The difference between those two numbers is your estimated equity:
Estimated equity = Vehicle value at end − remaining loan balance
That matters because buying may still leave you with something valuable after 36 months, while leasing usually does not.
For the lease path, the calculator uses a standard simplified lease formula:
Base lease payment = Depreciation charge + Finance charge
with:
Depreciation charge = (Adjusted cap cost − residual value) ÷ lease term
Finance charge = (Adjusted cap cost + residual value) × money factor
Sales tax is then applied to the lease payment in this simplified model, along with upfront lease cash, acquisition fee, disposition fee, mileage overage, maintenance, and annual registration costs.
Example: imagine a $42,000 vehicle. The lease looks attractive because the payment is lower and the car stays under warranty. But if you drive more than the mileage allowance and hand the car back with nothing to show for the payments, the total cost can climb fast. On the buy side, the payment may be higher, but after the same 36 months you might still have several thousand dollars of equity left in the vehicle. That is why the “cheaper monthly payment” story is only half the truth.
This calculator is meant to reveal that missing half. It is not a dealer quote and it does not model every state-specific lease tax rule, but it is very effective for showing where the decision actually turns: money factor, mileage, fees, depreciation, and end-of-period equity.
Lease vs buy calculator (USA): compare the real cost, not just the monthly payment
A lot of vehicle shoppers go into a dealership thinking they are choosing between two monthly payments. In reality, they are choosing between two very different financial paths. Leasing can keep the monthly number lower and may reduce short-term maintenance risk. Buying can cost more each month, but may leave you with equity when the comparison period ends. That difference is the reason a proper lease-vs-buy calculator matters.
One of the most common mistakes is underestimating how sensitive leases are to the details people gloss over. A shopper may look at a lower lease payment and assume it is the cheaper option, but that conclusion can fall apart once acquisition fee, disposition fee, due-at-signing cash, mileage overage, and a realistic tax treatment are included. If the driver also exceeds the allowed miles, the “cheap lease” story can change even faster.
On the buy side, the most common mistake is forgetting to value the vehicle at the end of the comparison. People often compare three years of lease payments against three years of loan payments and stop there. But if you bought, you may still own a car that has real value, even if the loan is not fully paid off yet. Ignoring that equity makes buying look worse than it really is.
There is also a behaviour side to this decision. Leasing often works best for people who want a newer vehicle every few years, stay within mileage limits, and prefer predictable short-term usage. Buying usually becomes more attractive when the driver keeps vehicles longer, drives more, or dislikes paying thousands of dollars over and over without building ownership.
The goal of this page is not to push one answer for everyone. The goal is to make the tradeoffs visible enough that you can stop relying on showroom psychology and compare the actual money instead.
FAQ
Because the lease payment is often lower than a loan payment, and that is the number people notice first. But once you include upfront cash, fees, mileage overage, and the fact that you do not own the vehicle at the end, the total picture can change.
The biggest reason is end-of-period equity. After making loan payments for the same number of months, you may still have a vehicle worth more than the remaining loan balance.
Very important. Drivers often underestimate annual mileage, and excess-mile charges can materially increase the real cost of a lease.
No. It uses a simplified tax treatment so the comparison stays practical and readable. Real lease and vehicle tax rules can vary by state and dealership structure.