Car Lease vs. Buy Calculator

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.

• 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.

Change the inputs and the answer moves. A shorter loan term shrinks the balance left at the end of your comparison period, which narrows leasing's advantage. A longer comparison period lets the loan finish and gives buying years of ownership with no payment.

The numbers above do not capture these costs, which can tip a real decision:

• Mileage limits and excess-mileage fees on a lease.
• Wear-and-tear charges assessed when you return the car.
• Rising maintenance costs on an aging car you own.
• Sales tax rules that differ between leasing and financing in some states.

For the practical tradeoffs beyond the cost math, such as flexibility and what happens at the end of the term, read car leasing vs. financing.