- Enter the vehicle price - the MSRP or negotiated price. In a lease, this is the capitalized cost before the cap reduction.
- Lease details - the money factor (ask the dealer; multiply by 2400 to get the equivalent APR), residual value (%), down payment (cap cost reduction), and annual mileage allowance.
- Buy details - your down payment, loan interest rate and term, and the estimated resale value at the end of the comparison period.
- The calculator compares total out-of-pocket cost over the same number of months.
Car Lease vs. Buy Calculator
Compare the total cost of leasing versus buying a car over the same period.
Vehicle
$
%
36 months
24mo36mo48mo60mo
Lease Details
%
$
$
$
Buy Details
$
%
$
Better over 36 months
Buying
by $2,047
Lease Payment /mo
$543
Buy Payment /mo
$593
| Money Factor APR equiv. | 4.32% |
| Residual Value | $19,250 |
| Total Lease Cost | $22,431 |
| Resale Value at 36mo | $22,000 |
| Buy Net Cost (after resale) | $20,384 |
Lease: you own nothing at the end. Buy net cost subtracts estimated resale value from total cost. If you plan to keep the car long-term, buying wins more strongly.
How to Use the Car Lease vs. Buy Calculator
Frequently Asked Questions
The money factor is the lease equivalent of an interest rate. To convert to an approximate APR, multiply by 2,400. A money factor of 0.00180 equals about 4.32% APR. Dealers sometimes mark up the money factor above the manufacturer's published "buy rate." Always ask for the money factor in writing and verify it against the manufacturer's current published rate (available on brand-specific forums and sites like MoneySuperMarket or Edmunds).
The residual value is the projected value of the car at lease end, set as a percentage of MSRP. A higher residual means less depreciation to cover in payments, so your monthly payments are lower. Residuals are set by the manufacturer's captive finance company and cannot be negotiated. Vehicles that hold their value well (Toyota, Subaru, Honda) tend to have higher residuals and lower lease payments relative to their purchase price.
Not always. Leasing makes financial sense if you always drive new cars every 2-3 years and stay under mileage limits, since you only pay for the depreciation portion rather than the full vehicle value. Buying wins if you keep the car 7-10+ years because you eliminate the payment entirely and own a paid-off asset. The break-even depends on the car's depreciation curve, interest rates, and your driving habits.
At lease end, you have three options: return the car and lease or buy new, buy the car for the pre-set residual value (useful if the car is worth more than the residual), or extend the lease month-to-month. Watch for excess mileage charges ($0.15-0.30 per mile over the limit) and excessive wear fees. If the car's market value exceeds the residual, buying it out and reselling can net a profit in strong used car markets.
Yes. A car lease appears on your credit report as a liability, similar to an auto loan. On-time payments help your credit; missed payments hurt it. The lease obligation factors into your debt-to-income ratio if you apply for a mortgage or other financing. If you return the car early, you typically owe the remaining payments plus early termination fees, which can be substantial.