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Car Lease vs Buy Calculator

Compare the total cost of leasing versus buying a vehicle.

Last updated: June 13, 2026

Calculator

$
$
$/mo
months
%
months

Results

Lease: Monthly Payment$350 /mo
Lease: Total Cost$17,600

Over 36 months

Buy: Monthly Payment$573 /mo
Buy: Total Cost$39,382

Over 60 months (you own the car)

Savings (Buy vs Lease)$21,782 cheaper to lease

How to Use This Calculator

  1. 1Enter the vehicle price and your down payment.
  2. 2Enter your lease monthly payment and lease term.
  3. 3Enter the buy loan APR and loan term.
  4. 4Compare total costs side by side.

Formula Explanation

The calculator compares total cost of leasing (monthly payments + down payment) against total cost of buying (loan payments including interest + down payment). The buy option gives you ownership.

Lease Total = (Monthly Payment × Term) + Down Payment Buy Monthly = P[r(1+r)^n] / [(1+r)^n − 1] Buy Total = (Monthly × Term) + Down Payment

Variables:

PLoan principal (price minus down payment)
rMonthly interest rate (APR ÷ 12 ÷ 100)
nNumber of monthly payments

Worked Examples

$35K car: Lease vs Buy

  1. 1. Lease: $350/mo × 36 + $5K down = $17,600
  2. 2. Buy: $30K loan at 5.5% for 60 months = $573/mo
  3. 3. Buy total: $573 × 60 + $5K = $39,370
Result: Lease: $17,600 (no car) | Buy: $39,370 (you own it)

Why Use This Calculator

  • See the true cost difference between leasing and buying in dollars.
  • Factor in interest rates and loan terms for accurate buy calculations.
  • Make a more informed financial decision about your next vehicle.
  • Consider the ownership value that buying provides versus leasing.
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Tips & Best Practices

  • Leasing costs less monthly but you never build equity.
  • If you drive over 12K–15K miles/year, buying is usually better due to lease mileage penalties.
  • Consider the total cost over 5–10 years, not just monthly payments.
  • Factor in maintenance — leased cars are usually under warranty.

Common Mistakes to Avoid

❌ Comparing only monthly payments without considering total cost.

✅ Always calculate total cost including down payment, interest, and full term.

❌ Not factoring in that buying gives you an asset worth money at the end.

✅ Subtract estimated resale value from buy total for a fairer comparison.

❌ Ignoring lease-end fees like excess mileage or wear charges.

✅ Budget $1,000–$3,000 for potential lease-end charges in your comparison.

Frequently Asked Questions

Is it better to lease or buy?
It depends on your situation. Leasing is better if you want a new car every 2–3 years, drive under 12K miles/year, and prefer lower monthly payments. Buying is better for long-term savings, high mileage drivers, and those who want to build equity.
What happens at the end of a lease?
You return the car and may owe fees for excess mileage or wear. You can also buy the car at its residual value or start a new lease on a different vehicle.
Does leasing affect my credit?
Yes, a lease appears on your credit report like a loan. Making payments on time builds credit. Missing payments hurts credit just like any other loan.
What is a money factor in leasing?
The money factor is the lease equivalent of an interest rate. To convert to APR, multiply by 2,400. A money factor of 0.002 equals 4.8% APR. Lower is better.
Can I negotiate a lease?
Yes. You can negotiate the vehicle price (capitalized cost), money factor, down payment, and mileage allowance. Dealers often have flexibility on capitalized cost.
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Disclaimer: This calculator is provided for informational and educational purposes only. Results are estimates and should not be used as a substitute for professional advice. RediCalc.com makes no guarantees regarding the accuracy, completeness, or suitability of any calculations. Always consult a qualified professional before making financial, health, construction, or other important decisions.

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