Lease vs Buy a Car
The monthly payment isn't the real comparison. Total cost over how long you'll actually keep the car is.
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If you keep it longer or shorter
Leasing tends to win for shorter ownership, buying for longer. Here's the crossover:
| Years kept | Total — lease | Total — buy | Cheaper |
|---|
How this calculator works
For buying, we calculate your loan's monthly payment (standard amortization), add up what you'd actually pay during your hold period, factor in any loan balance still owed if you sell before the loan is paid off, and subtract your car's resale value. That's your true total cost of ownership — not just what you signed up to pay each month.
For leasing, we add the drive-off cost to your total lease payments over the hold period. If you'd keep the car longer than one lease term, we assume you re-lease under similar terms (drive-off cost included again each cycle) — a simplification, since actual re-lease terms aren't guaranteed to match.
What this doesn't account for
- Sales tax, registration, and insurance differences between leasing and owning, which vary by state and situation.
- Mileage limits and excess-mileage or wear-and-tear fees that leases typically charge.
- Maintenance costs — often lower on a leased car still under warranty than on an aging owned car.
- The resale value estimate is exactly that — an estimate, and actual depreciation varies by make, model, and market conditions.
- Early lease termination penalties if you end up keeping the car for less than the lease term.
Frequently Asked Questions
What costs does the calculator include for leasing?
Lease total includes all monthly payments over the lease term, the down payment, and any fees paid upfront. At lease end, you hand the car back and get nothing — so the entire amount spent is a cost with no offset from the car's value.
How is the total cost of buying calculated?
We add your down payment, all loan payments over the loan term, and any upfront fees, then subtract the estimated resale value of the car at the end of your ownership period. This gives the net cost of ownership — what buying actually costs you once you factor in what you'd get back by selling.
What ownership period should I use?
Use how long you actually plan to keep the car, not the loan term. If you pay off the loan in 5 years but plan to drive it for 8 years, use 8 years as the ownership period — the car keeps running with no payment after the loan ends, which significantly improves the buying case.
Does the calculator factor in mileage overage charges?
No. Lease overage charges can be significant if you drive more than the contract allows (typically 10,000–15,000 miles per year). If you drive above the limit, add any expected overage cost to your estimated monthly lease payment before entering it.
Related calculators
This tool provides general information based on the numbers you enter. It isn't financial, tax, or legal advice — actual loan terms, lease terms, taxes, and fees vary by lender, dealer, and location.