Lease vs Buy Calculator
Compare the true cost of leasing vs. buying a vehicle or equipment. Includes total payments, resale value, opportunity cost of down payment, maintenance differences, and lease-end buyout analysis.
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Total Lease Cost
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Total Buy Cost —
Monthly Loan Payment —
Lower Total Cost —
Extended More scenarios, charts & detailed breakdown ▾
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Total Lease Cost
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Net Buy Cost (after resale) —
Monthly Loan Payment —
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Professional Full parameters & maximum detail ▾
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Total Lease Cost
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Net Buy Cost (after resale) —
Opportunity Cost of Down Payment —
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True Total (Buy with all costs) —
Lease-End Buyout vs Resale —
How to Use This Calculator
- Enter the purchase price of the vehicle or equipment.
- Enter the lease monthly payment and lease term in months.
- Enter your loan interest rate and loan term for the buy scenario.
- See total lease cost, total buy cost, and monthly payment comparison instantly.
- Use the Vehicle tab to include resale value and mileage overage.
- Use the Equipment tab for Section 179 deduction and depreciation analysis.
- Use the Professional tab for full analysis including opportunity cost and lease-end buyout comparison.
Formula
Monthly Loan Payment = P × r(1+r)^n / ((1+r)^n − 1)
Net Buy Cost = Down Payment + Total Loan Payments − Resale Value
Total Lease Cost = Monthly Payment × Lease Term
Example
$35,000 car, $5,000 down, 6.5% APR, 60-month loan. Monthly payment = $580. Buy total = $5,000 + $580×60 = $39,800. Less $18,000 resale = net $21,800. Lease: $350×36 = $12,600. Lease is cheaper short-term; buying cheaper long-term.
Frequently Asked Questions
- Leasing almost always has lower monthly payments (you pay only for depreciation during the lease term). But buying builds equity — when the loan is paid off, you own an asset. Over 10+ years of keeping a vehicle, buying typically costs less. If you prefer new cars every 2–3 years, leasing can be cheaper in total expenditure but you never build equity.
- For leasing: monthly payments, any upfront fees, mileage overage charges, wear-and-tear fees. For buying: down payment, monthly loan payments, minus expected resale value. Also consider: insurance difference, maintenance costs (leased vehicles are usually under warranty), and opportunity cost of the down payment.
- The residual value is the vehicle's projected worth at the end of the lease term. The higher the residual, the lower your lease payments (you're only paying for the depreciation). A vehicle with 55% residual after 3 years gives you lower payments than one with 45% residual at the same price.
- If you put $5,000 down on a car purchase instead of investing it at 7% annual return, you forgo $5,000 × (1.07^5 − 1) = $2,014 in investment growth over 5 years. This is the "opportunity cost" — the return you gave up to buy the asset.
- Compare the lease-end buyout price to the actual market value (check Kelley Blue Book, CarGurus). If the buyout is below market value, buying is advantageous. If above market value, you're overpaying compared to buying the same car on the open market.
Related Calculators
Sources & References (5) ▾
- CFPB — Auto Leasing vs. Buying — Consumer Financial Protection Bureau
- FTC — Automotive Leasing — Federal Trade Commission
- Consumer Leasing Act (Regulation M) — Consumer Financial Protection Bureau
- IRS Publication 463 — Vehicle: Lease vs. Purchase Deductions — Internal Revenue Service
- Federal Reserve — Vehicle Finance and Consumer Credit — Federal Reserve