Lease vs Buy Car Calculator
Compare leasing and buying a car over the same term, netting the buy cost against resale value to see which is cheaper.
How it's calculated
Leasing and buying look different but the fair way to compare them is the net cost over the same stretch of time. Leasing is pure cost. You pay to use the car and hand it back with nothing to show. Buying costs more each month on the loan, but at the end you own an asset you can sell, so the true cost of buying is what you paid minus the equity you hold. This calculator lines them up over the lease term.
Work through the default over 36 months. Leasing costs $2,000 at signing plus $400 a month, which is $16,400 total. Buying a $35,000 car with $3,000 down and a 6 percent loan over 60 months means a $618.65 monthly payment. Across 36 months you pay the $3,000 down plus $22,271 in payments. But you still owe $13,958.51 on the loan and the car is worth $21,000, so you hold $7,041 of equity. Net that out and buying costs $18,229.90 over the same 36 months. Leasing comes out $1,829.90 cheaper across this window.
That short-term edge for leasing is common, and it flips the longer you keep the car. Once a bought car loan is paid off, you drive it for years with no payment, while a leaser starts a new lease and keeps paying forever. Leasing tends to win if you always want a new car every few years and value the lower payment. Buying tends to win if you keep cars long past the loan. Adjust the resale value and the lease terms to fit a specific offer.
Assumptions
- Both options are compared over the same lease-length window. Buying nets your cash out against the equity you hold, which is the resale value minus the loan balance still owed.
- The loan is principal and interest compounded monthly. Insurance, taxes, and maintenance are similar either way, so they are left out.
Last updated: 2026-08-08
These assumptions follow our general methodology.
Frequently asked questions
Is it cheaper to lease or buy a car?
Over a short window like three years, leasing often has the lower cost because you are only paying for the depreciation and not building equity. Over the long run, buying and keeping the car well past the loan is usually cheaper, since you eventually have years with no payment at all.
Why does buying net out the resale value?
When you buy, part of every payment builds equity in a car you can later sell. To compare fairly against a lease, where you own nothing at the end, you subtract that equity, which is the resale value minus the loan balance still owed, from what you paid.
What is the drive-off amount on a lease?
It is the cash due at signing, which can include the first payment, a down payment or cap cost reduction, fees, and taxes. A larger drive-off lowers the monthly payment but raises the total lease cost, so this calculator counts it in full.
When does leasing make the most sense?
Leasing fits people who want a new car every two or three years, want the lowest monthly payment, and do not drive many miles, since leases cap mileage. If you keep cars for a long time or drive a lot, buying almost always costs less overall.