Lease vs Buy Calculator
Make smart capital decisions between leasing and buying. This calculator balances monthly cash flows, financing costs, and estimated resale equity to identify the superior financial path.
Negotiated purchase price
Cash down payment for purchase
Annual interest rate for financing
Duration of loan financing
Contracted monthly lease payment
Duration of lease contract
Upfront cash due at lease signing
Market value of asset after ownership period
Option with lower net cost over tenure
How to Use This Calculator
- Enter the asset purchase price and purchasing financing terms.
- Input the purchase down payment and expected end-of-term resale value.
- Enter the lease monthly payment, lease duration, and upfront drive-off fees.
- Compare net ownership cost against total lease outlay.
Formula & Calculation Methodology
Evaluates net cash depletion by comparing non-recoverable lease outflows against net ownership depreciation.
Worked Example
$35,000 car over 36 months: Buy at 6% with $19,000 resale vs Lease at $420/mo with $2,500 down
Frequently Asked Questions
Why is buying usually cheaper in the long run?↓
Buying allows you to build equity and hold the vehicle after the loan is paid off with zero monthly payments, whereas leasing is continuous payment.
When is leasing a vehicle preferable?↓
Leasing is advantageous if you prefer driving new cars every 3 years under warranty, want lower monthly payments, or use the vehicle for tax-deductible business miles.
What hidden charges exist in leases?↓
Leases carry mileage caps (typically 10,000–12,000 miles/year with $0.15–$0.25/mile penalties) and excessive wear-and-tear fees upon return.
Can I purchase the vehicle at the end of the lease?↓
Yes, almost all automotive lease agreements include a buyout option at a predetermined residual value stated in your contract.
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Source Citation & Disclaimer
Informational tool only; not licensed tax, legal, or financial advice.