How is the net cost of buying calculated?

Net cost of buying = total amount paid (down payment plus loan payments over your comparison period) minus the resale value you'd get selling the car, plus any loan balance still remaining. This nets out the asset value you keep, which is the key difference from leasing, where you own nothing at the end.

Why does leasing often look cheaper over a short period?

Lease payments are typically lower than loan payments because you're only paying for the vehicle's depreciation during the lease term, not its full value. Over a short ownership period, that lower monthly cost often beats buying — but the comparison can flip over a longer period once a car loan is paid off and you own the vehicle outright.

What isn't included in this comparison?

Mileage limits and excess-mileage fees on a lease, wear-and-tear charges at lease-end, sales tax differences between financing and leasing in some states, and insurance cost differences aren't modeled here. All of these can shift the real-world comparison, so use this as a starting estimate and read your actual lease contract terms carefully.

How accurate is the estimated resale value?

Resale value varies significantly by make, model, mileage, and condition — 50-60% of original price after 3 years is a common ballpark for many vehicles, but some hold value much better or worse. Check a specific vehicle's typical depreciation curve (many automotive sites publish these) for a more accurate estimate than a flat percentage.

Does buying always win over a long enough period?

Usually, since a paid-off car keeps providing value with no further loan or lease payments, while a lease requires either signing a new lease or eventually buying the car anyway. But this depends on maintenance costs on an aging owned vehicle rising over time, which isn't factored into this comparison.

Is my data stored anywhere?

No. All calculations run locally in your browser. Nothing you enter is transmitted to a server or stored.

AI Insights

Car Lease vs. Buy Calculator

Compare the net cost of leasing versus financing a car over your ownership period — including resale value, remaining loan balance, and total payments.

Last updated August 28, 2026

Buying

Vehicle price ($)

Down payment ($)

Loan rate (%)

Loan term (years)

Est. resale value at horizon (%)

% of original price — 50-60% at 3 years is typical.

Leasing

Monthly lease payment ($)

Due at signing ($)

Comparison period

Leasing costs less over 3 years

$3,813

Net cost of buying

$20,713

total paid − resale value + loan balance

Net cost of leasing

$16,900

total paid, nothing owned at the end

Buying detail	Amount
Monthly loan payment	$633.64
Estimated resale value	$19,250
Remaining loan balance at horizon	$14,152

Over a short three-year horizon, leasing often shows lower monthly payments because you are only paying for the vehicle's expected depreciation during that specific window. However, this payment structure means you build no equity in the vehicle, whereas a financed purchase puts you closer to owning an asset payment-free once the loan is fully settled. Anyone considering this option should also factor in strict mileage caps and potential end-of-lease condition fees, which can quickly narrow the initial cost gap.

AI-generated insight

A planning estimate — actual resale values, lease terms, mileage fees, and end-of-lease charges vary and can shift this comparison.

How to use the car lease vs. buy calculator

1
Enter the vehicle price, down payment, loan rate, and loan term for buying.
2
Enter the monthly lease payment and amount due at signing from an actual lease offer.
3
Choose a comparison period — how long you'd actually keep the car either way.
4
Your net cost comparison updates instantly as you adjust any field.

How the net cost comparison works

Buying's net cost accounts for the resale value you keep; leasing's net cost is simply everything you paid, since you own nothing at the end.

Net cost of buying = total paid − resale value + remaining loan balance

Worked example: a $35,000 car with a $3,000 down payment, financed at 7% over 5 years, compared against a $400/month lease with $2,500 due at signing, over a 3-year comparison period: buying totals $25,811 paid, with a $19,250 estimated resale value and a $14,152 remaining loan balance, for a net cost of $20,713. Leasing totals $16,900 paid, with nothing owned at the end. In this example, leasing costs about $3,813 less over the 3-year period.

Extend the comparison to 6 years instead, and the picture usually flips — the loan gets paid off partway through, after which buying has no more payments at all, while a lease would need to be renewed or the car purchased outright.

When leasing tends to win, and when buying does

Leasing tends to win over short ownership periods (2-3 years), for drivers who want a new car every few years, or who drive low annual mileage that stays within lease limits.
Buying tends to win over long ownership periods (5+ years), especially once a loan is paid off and the car keeps providing value with no further payments.
Mileage matters a lot — high-mileage drivers often face steep lease overage fees that aren't in this calculator, tilting the real comparison further toward buying.

Already decided to finance? Our Auto Loan Calculator → breaks down your exact monthly payment and total interest.

Frequently asked questions

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