Car Lease vs Buy Calculator (Total Cost Over the Term)
Over a fixed term, buying builds equity; leasing rents the depreciation. This sketch finances the purchase over the same months as the lease, subtracts an estimated resale at the end, and compares that net cost with lease payments plus drive-off and acquisition fees. Taxes, insurance, mileage overages, and wear fees are not included — they often decide the real winner.
Buy net − lease net (positive = lease cheaper in this sketch)-1,011
Buy net cost (cash − resale)20,046
Lease net cost (no car at end)21,058
Buy monthly payment973.50
Lease monthly (pre-tax sketch)482.29
Lease residual value19,250
How this calculation works
Buy: loan = price − down. Monthly payment is a standard amortizing loan at the buy APR over term months. Net buy cost = down + all payments − resale value (loan is assumed paid off at term).
Lease: net cap = price − down. Residual = price × residual %. Money factor = lease APR / 2400. Monthly ≈ (net cap − residual)/term + (net cap + residual)×money factor. Lease cost = down + acquisition fee + monthly × term. You own nothing at the end.
“Lease saves” is buy net cost minus lease net cost. Positive means the lease sketch spent less cash for use of the car, ignoring the fact that the buyer still has a car (already credited via resale).
Caveats: residual is usually a percent of MSRP, not of your negotiated price; we use one price box. Mileage limits, excess wear, sales tax on leases vs purchases, and gap insurance can swamp a few hundred in “lease saves”.
Worked example
Price 30,000, down 3,000, 36 months, 0% both APRs, 50% residual, resale 15,000, no fee: buy monthly 750, lease monthly 333.33, both net costs 15,000 — a wash before tax and miles. Add a 695 acquisition fee and the lease costs more.
Frequently asked questions
Why can the result be a wash at 0%?
If residual equals resale and there is no lease fee, you are paying the same depreciation either way. Real leases add money factor and fees; real sales add tax and a different resale.
Is money factor APR/2400 correct?
It is the common conversion dealers use (APR 6% → 0.0025 MF). Some quotes use a marked-up factor. Type the APR that matches the MF you were given: MF × 2400.
What residual should I type?
Use the residual in the lease worksheet (often 50–60% after 36 months on new cars). Guessing high makes the lease look cheaper than the contract.
Does the buyer really own the car free and clear?
Only if the loan term equals the comparison term. If you would finance 60 months but compare 36, remaining principal is not modeled — keep terms equal or this buy cost is too kind.
Insurance and maintenance?
Not included. Lease contracts may require extra coverage; owners pay repairs after warranty. Add those outside this sketch.