The real total cost of leasing vs buying — depreciation, interest, fees, resale value and mileage included. Free, no signup.
Use the price you can actually negotiate, not just the window sticker.
A reference point for your deal.
This drives both estimates.
Same time horizon for lease and buy.
Your best estimate beats the lease default.
Financing, depreciation, and the value you’ll still have at the end.
Tax, title, registration, and dealer fees.
Ongoing ownership
Use the payment from the offer sheet. We add the costs that are easy to miss.
Cash due before your first payment.
Acquisition and other upfront lease fees.
Disposition or turn-in fee.
Expected value at lease end.
Usually written as a small decimal.
A clearer decision
Leasing usually wins on monthly payment; buying usually wins on total cost once you keep the car past the loan. This calculator settles it for your specific deal by putting both options on the same timeline — the same car, the same years, the same mileage — and adding every cost that a monthly payment hides: depreciation, interest, taxes, fees, resale value, and mileage penalties.
Updated · Formulas published below
Choose 3, 4, 5, or a custom number of years, then enter the miles you honestly drive each year. Both options are measured over this identical horizon.
Add the negotiated price, down payment, trade-in, loan APR, term, taxes, and fees from your financing offer.
Add the monthly payment, due at signing, acquisition and disposition fees, residual percentage, money factor, and the mileage allowance from the lease offer sheet.
Compare the total cost, monthly cost, equity at the end, and cost per mile. The option with the lower total cost is cheaper for your situation.
Buying is usually cheaper across the full life of a car, because the payments eventually stop and you keep an asset worth selling. Leasing is usually cheaper month to month, because you pay only for the depreciation during the term rather than the whole vehicle. The crossover point normally lands between years four and six — before it, leasing often looks better; after it, buying pulls decisively ahead.
Every new car loses value, but the owner carries the resale risk. Buying exposes you to the gap between what you paid and what the car is worth later. Leasing charges you for an agreed portion of that loss through the payment, while the leasing company keeps the residual-value risk — which is why a lease looks cheap when residuals are high and expensive when they are not.
Leasing competes well when the manufacturer subsidises the residual value, you stay inside the mileage allowance, and you replace the car every two to four years. It also frees up cash that would otherwise sit in a depreciating asset, which can matter more than the long-run total when the two are close.
Buying improves the longer you keep the car. Once the loan is paid off, your monthly cost drops to insurance and maintenance while the car still holds trade-in value. Buying also removes turn-in inspections, wear charges, and excess-mileage penalties from the equation entirely.
The factors below decide most lease-versus-buy outcomes, independent of any specific deal.
| Factor | Buying | Leasing |
|---|---|---|
| Monthly payment | Higher — you finance the whole car | Lower — you finance only the depreciation |
| Upfront cash | Down payment plus taxes and fees | Due at signing plus acquisition fee |
| Ownership at the end | You own the car outright | You own nothing |
| Equity built | Resale value minus any loan balance | None |
| Depreciation risk | You carry it | The lessor carries it |
| Mileage limits | None | Typically 10,000–15,000 per year, then $0.15–$0.30 per extra mile |
| Wear and tear | Affects resale value only | Charged at turn-in beyond normal wear |
| Best time horizon | Six years or longer | Two to four years |
| Cost after the loan ends | Insurance and maintenance only | A new payment starts on the next lease |
| Modifications | Allowed | Generally prohibited |
Plain-language glossary
Worked example
A $42,000 car driven 12,000 miles a year for 5 years, financed at 6.49% APR over 60 months, against a $479/month lease with $2,500 due at signing and a 52% residual.
Buying totals $44,127 and leasing totals $49,538, so buying is cheaper by $5,411. The defaults in the calculator above reproduce this example — change them to make it yours.
Buy total
$44,127
$735 / month
Lease total
$49,538
$826 / month
Buy equity
$21,840
at the end
Estimated gap
$5,411
buy is lower
Nothing here is hidden. Every figure the tool reports comes from one of the formulas below, so you can reproduce or audit any result by hand.
Questions, answered
Buying is usually cheaper over the full life of the car, because you eventually own an asset and stop making payments. Leasing is usually cheaper month to month and over very short horizons, because you only pay for the depreciation during the term instead of the whole vehicle. The crossover typically arrives somewhere between years four and six of ownership. This calculator finds the crossover for your actual numbers rather than an average.
Add up every dollar that leaves your account over the same period, then subtract what you still own at the end. For buying: down payment, trade-in, all loan payments made, insurance, maintenance, plus any loan balance still outstanding, minus the car’s resale value. For leasing: due at signing, every lease payment, acquisition and disposition fees, sales tax, insurance, maintenance, and excess-mileage charges — with nothing subtracted at the end, because you own nothing. The lower total is the cheaper option.
A down payment lowers the amount financed and therefore the interest you pay, but it is still your cash and still counts in the total. It changes the monthly payment far more than it changes the true cost. Putting a large amount down on a lease is riskier still: if the car is totalled or stolen early, that money is generally not returned to you.
Residual value is the amount the leasing company predicts the car will be worth when the lease ends, usually written as a percentage of MSRP. A 52% residual on a $45,000 car means they expect it to be worth about $23,400 at turn-in. You pay for the difference between the capitalized cost and the residual, so a higher residual means a lower monthly payment. It is the single most powerful number in a lease quote.
The money factor is the lease equivalent of an interest rate, quoted as a small decimal such as 0.0021. Multiply it by 2,400 to get the approximate APR: 0.0021 × 2,400 = 5.04% APR. Comparing the converted APR against the loan APR you were offered tells you whether the lease financing is actually competitive.
A typical new car loses roughly 20% of its value in the first year and about 15% of its remaining value in each following year, leaving it worth around 40–55% of its purchase price after five years. Depreciation is the largest single cost of owning a new car — usually larger than fuel, insurance, interest, or maintenance — even though no bill ever arrives for it.
Use both, in their proper places. MSRP is the reference point lease residuals are quoted from, so enter it as the sticker price. The negotiated price is what actually drives your cost, so enter the number you can genuinely get — it determines the loan amount when buying and the capitalized cost when leasing. Negotiating the price down helps a lease just as much as it helps a purchase, which many shoppers do not realise.
Enter your honest annual mileage, not the lease allowance. The US average is about 13,500 miles per year, while standard leases allow 10,000 or 12,000. If you drive more than the allowance, the calculator charges the overage at your excess-mileage rate — typically $0.15 to $0.30 per mile — which is where leases quietly become expensive for high-mileage drivers.
Generally no. Excess-mileage charges are the most common way a cheap-looking lease turns expensive. At $0.25 per mile, driving 18,000 miles a year on a 12,000-mile allowance costs $1,500 per year, or $4,500 over a three-year lease. High-mileage drivers usually do better buying, where extra miles reduce resale value but are never billed directly.
You return the car, pay a disposition fee of typically $350 to $500, and settle any charges for excess mileage or wear beyond the contract’s definition of normal. You then have no vehicle and no equity. Alternatively you can buy the car for the residual value stated in your contract, which is worth doing only when the residual is below the car’s real market value.
Yes. The monthly cost divides the estimated total cost by the number of months being compared, and that total includes insurance, maintenance, taxes, fees, financing, and — on the buy side — the resale value you get back. It is deliberately higher than a payment quote, because a payment quote is not what the car costs you.
No. Every calculation runs locally in your browser using JavaScript. Nothing is transmitted to a server, no account is required, and no figures are stored or logged.
No. This is an educational estimate, not a quote, appraisal, tax opinion, or personal financial recommendation. Residual values, money factors, tax treatment, and fees vary by lender, state, and month. Always check the actual contract and lender disclosures before signing.