$684.82
$46,088.91
$15,085.98
$31,002.93
2
$36,400.00
$430.60
$505.56
$5,397.07
$684.82
$46,088.91
$15,085.98
$31,002.93
2
$36,400.00
$430.60
$505.56
$5,397.07
The Lease vs Buy Calculator compares the total cost of leasing versus purchasing a vehicle over your intended ownership period. It accounts for loan payments, depreciation, residual value, and the number of lease cycles to provide a true apples-to-apples comparison.
The lease-vs-buy decision is one of the most debated topics in personal finance. Leasing proponents cite lower monthly payments, newer vehicles, and warranty coverage. Buying advocates point to equity accumulation, no mileage restrictions, and lower long-term costs. The truth depends entirely on your specific circumstances, driving habits, and financial goals.
The financial mathematics strongly favor buying when you plan to keep the vehicle long-term (5+ years). Once a loan is paid off, you continue driving with no payment — often for 3-7 more years. Meanwhile, a lessee must start a new lease every 2-3 years, paying continuous monthly payments. Over 10 years, a buyer who keeps one car saves $15,000-$30,000 compared to always leasing equivalent vehicles.
However, if you always want a new vehicle with the latest technology and safety features, leasing can make financial sense — especially for luxury vehicles with high residual values. The key is to compare the total cost honestly: buying includes depreciation (the difference between what you paid and what the car is worth when you sell), while leasing costs include all payments plus the down payment on each new lease.
This calculator factors in vehicle depreciation (estimated at 15% per year) to compute the vehicle's equity at the end of your ownership period. It also calculates how many lease cycles you would need over the same period. The result is a net comparison showing which option costs less for your specific scenario.
Buy Cost: Total loan payments + down payment − vehicle value at end (equity). Vehicle value uses ~15% annual depreciation.
Lease Cost: Monthly lease payment × lease term × number of lease cycles + down payments.
Savings = Lease Total − Buy Net Cost. Positive means buying saves money.
Buying almost always wins over 5+ years because loan payments end but the car keeps running. Leasing wins if you value always having a new car and drive low miles. The break-even is typically 3-4 years — shorter ownership favors leasing, longer favors buying.
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Results
Over 6 years: buying costs ~$27K net (after equity), leasing costs ~$42K. Buying saves ~$15K.
Inputs
Results
Over 3 years: buying and leasing costs are closer. Buying still saves ~$2,400 due to retained equity.
Buying is cheaper long-term (5+ years) because the loan ends but you keep the car. Leasing is cheaper monthly but costs more over time because payments never stop. Over 10 years, buying saves $15K-$30K.
When you want a new car every 2-3 years, drive under 12-15K miles/year, value warranty coverage, or need a vehicle for business (leases can offer tax advantages for business use).
Depreciation is the biggest cost of ownership. A $40,000 car loses ~40% of its value in the first 3 years (~$16,000). However, you retain the remaining equity, which offsets the ownership cost.
If you always trade, the cost is similar to leasing because you absorb the steepest depreciation years. In this case, leasing may be cheaper because monthly payments are typically lower.
Yes. Vehicles with high residual values (Toyotas, Hondas, Lexus) are better to lease (lower payments). Vehicles that depreciate heavily are better to buy and keep long-term.
Leased vehicles are usually under warranty for the full lease term. Bought vehicles incur maintenance costs after warranty (typically year 3+), but these average $500-$1,500/year — far less than a lease payment.
Yes. Negotiate the selling price for either option. For leases, also negotiate the money factor and ask about incentives. For purchases, negotiate the price, rate, and trade-in value.
Businesses may deduct lease payments as an expense. For purchased vehicles, depreciation can be deducted under Section 179 (up to limits). Personal use vehicles have no tax benefit for either option.
High-mileage drivers (15K+ miles/year) should buy because lease mileage overage charges ($0.15-$0.30/mile) can add up quickly. A 20K-mile/year driver would pay $1,500-$3,000/year in excess mileage fees.
Typically 3-4 years. If you keep the vehicle less than 3 years, leasing is often cheaper. Beyond 4-5 years, buying becomes increasingly advantageous as you drive a paid-off vehicle.
Roboculator Team
The Roboculator Team explains calculations, planning tools, and practical formulas in clear language for real-life situations.
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