Automotive
Car Lease vs Buy Calculator
Calculate total lease cash outflow, estimated purchase loan payment, purchase cash outflow, and net purchase cost after resale value. The two-lane ownership visualization shows lease payments ending without an owned asset and purchase payments ending with resale credit.
Total lease payments entered-
Estimated purchase loan payment-
Purchase payments plus down-
Purchase outflow less resale value-
Decision view
Lease and purchase ownership lanes
Lease and purchase ownership lanesBoth alternatives use the same month horizon; only the purchase lane ends with an entered resale-value credit.
Exact scenario comparisonPurchase loan rate (%) changes while all other entered assumptions remain constant.
| Purchase loan rate (%) | Total lease payments entered | Estimated purchase loan payment | Purchase payments plus down | Purchase outflow less resale value |
|---|
Period-by-period detail
Monthly schedule and annual summary
How to use Car Lease vs Buy Calculator
- Set the same comparison term and comparable vehicle specification on both sides.
- Enter every confirmed lease cash item and a purchase resale value consistent with mileage, condition, and market assumptions.
- Add omitted tax, insurance, maintenance, mileage, disposition, and opportunity-cost layers before making a decision.
Calculator guide
Understanding Car Lease vs Buy Calculator
Lease-versus-buy comparison must reconcile cash paid with the asset value retained at the comparison date. This page compares entered lease outflow with financed purchase outflow less estimated resale value, while leaving omitted taxes, fees, maintenance, and opportunity cost visible.
Calculation method
How the calculation works
Total lease cash outflow and compare it with financed purchase payments plus down payment less estimated resale value. Multiply lease payment by comparison months and add cash due at signing. Finance purchase price minus down payment with the entered annual rate over the comparison term, add down payment to payments, and subtract estimated resale value for net purchase cost.
Contract review
Items that can reverse the comparison
Small-looking contract terms can matter more than the payment difference.
Worked situations
Practical examples
- $620 for 36 months plus $3,500 due at signing produces $25,820 of entered lease outflow.
- A $48,000 purchase with $8,000 down finances $40,000 over the comparison term.
- Subtracting a $30,000 estimated resale value recognizes that the buyer retains an asset at month 36.
Better inputs
Useful tips
- Treat refundable deposits separately from nonrefundable acquisition or due-at-signing charges.
- Use an after-tax resale estimate net of selling or trade costs.
- Check lease mileage limits, wear standards, disposition fees, and purchase-option terms.
Before relying on the result
Limitations and common mistakes
- The purchase loan term is tied to the comparison months and may not match an actual longer loan.
- Taxes, registration, insurance, maintenance, repairs, mileage penalties, disposition fees, and investment returns are excluded.
- Resale value is uncertain and can dominate the comparison.
Reference
Key terms
- Due at signing
- Entered upfront lease cash that is added to recurring lease payments.
- Purchase outflow
- Down payment plus modeled loan payments during the comparison term.
- Resale credit
- Estimated vehicle value subtracted from purchase outflow at the comparison date.
- Net purchase cost
- Modeled purchase outflow less entered resale value.
Important note
Calculated from the entered vehicle and operating values. Actual prices, financing terms, efficiency, maintenance, insurance, taxes, and resale outcomes can differ.
Frequently asked questions
Does a lower monthly lease payment mean leasing is cheaper?
Not necessarily. Compare total upfront and recurring cash, fees, mileage, and the asset value retained by a buyer.
Why is resale value subtracted from purchase cost?
The buyer owns an asset at the comparison date and can sell or trade it, subject to any remaining loan balance.
What if the purchase loan is longer than the lease?
A complete comparison must include payments made and remaining loan balance at the common horizon.
Should insurance be included?
Include the difference if coverage or premiums vary materially between lease and ownership alternatives.