Leasing and buying a car serve different priorities. Leasing offers lower monthly payments and a new car every few years; buying costs more per month but eventually gives you a paid-off, owned asset. This calculator compares the total cost of each path over your chosen time frame so the decision rests on real numbers.
How leasing and buying differ
When you lease, you pay for the car's depreciation during the lease term plus interest and fees — you are essentially renting. When you buy, you pay for the entire vehicle but keep it afterward. Over a short window, leasing usually costs less; over a long window, buying wins because ownership eventually eliminates the payment.
The equity difference
At the end of a lease you own nothing and start over. At the end of a loan you own a car with resale value that offsets your total cost. The calculator factors in that residual value so you compare true net cost, not just the payments.
A worked example
Leasing a $35,000 car at $400 a month for three years costs about $14,400 plus a down payment, with nothing to show at the end. Buying the same car might run $594 a month, but after the loan is paid off you own an asset worth perhaps $15,000 — so over six or seven years, buying is typically the cheaper path.
When each option makes sense
- Lease if you value driving a new car every few years and drive fewer than about 12,000 miles annually.
- Buy if you keep cars a long time and want to eventually be payment-free.
- Watch lease mileage limits and wear-and-tear charges, which add up quickly.
- If you drive a lot or plan to keep the car past the loan, buying almost always costs less overall.