Lease Vs Buy Car Calculator
Compare the total costs of leasing versus buying a car over a specified period. Enter car price, down payment, loan terms, lease details, and more to see which option is cheaper.
Published by:
isCalculator Editorial Team
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How to use this tool?
How to Use the Lease vs Buy Car Calculator
This tool compares the total cost of leasing versus buying a car over the loan or lease term. Follow these steps:
- Enter your car details – Input the Car Price, Down Payment, Trade-in Value, and Sales Tax Rate (as a percentage, e.g., 8 for 8%).
- Set buying parameters – Provide Loan Term (months), Interest Rate (APR %), and expected Resale Value after the loan ends.
- Set leasing parameters – Enter Lease Term (months), Money Factor (as a decimal, e.g., 0.00125), Residual Value (as a percentage of MSRP, e.g., 50 for 50%), and fees (Acquisition and Disposition).
- Include mileage and costs – Input Annual Miles, Excess Mile Cost (in cents per mile), and separate monthly Insurance and Maintenance costs for buying vs. leasing.
- Click "Calculate" – The results show total costs for each option, a breakdown, and a comparison telling you which is cheaper.
Tip: All monetary values are in dollars. Percentages (sales tax, interest rate, residual value) are entered as plain numbers (e.g., 8 for 8%). The money factor is a small decimal (e.g., 0.00125). Adjust inputs to match your specific quotes or estimates.
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Frequently Asked Questions
Leasing is like renting a car for a fixed term, with lower monthly payments but no ownership. Buying means you own the car after paying off the loan, but monthly payments are higher.
The lease payment is the sum of depreciation (car price minus residual value divided by term) and a rent charge (car price plus residual value times money factor).
Car price, down payment, loan interest rate, lease money factor, residual value, and expected resale value significantly affect the comparison.
