How to use the lease vs buy calculator
- Enter the car price and sales tax.
- Under Buy, enter your down payment, the loan APR and the number of months.
- Under Lease, enter the monthly payment, the amount due at signing, the lease length and expected fees at the end.
- Set how much value the car loses each year.
The calculator compares both over the lease term: the lease cost, and the cost of buying after subtracting what you'd own (the car's value minus the loan balance).
The example in detail
| Lease | Buy | |
|---|---|---|
| Up front | $3,000 due at signing | $3,000 down |
| Monthly | $420 × 36 | $667.21 × 36 (60-month loan) |
| End | $400 fees | Car worth about $21,500, loan left about $15,000 |
| Cost over 36 months | $18,520 | $20,503 |
Leasing looks cheaper here, but at the end of the lease you have nothing, while the buyer owns about $6,500 of equity and keeps driving. If the buyer keeps the car another 3–5 years after the loan is paid off, buying usually ends up far cheaper.
When leasing makes sense
- You want a new car every 2–3 years with warranty coverage.
- You drive within the mileage limit (often 10,000–12,000 miles a year).
- You want a lower monthly payment and accept never owning the car.
- You use the car for a business where lease payments may be partly deductible.
When buying makes sense
- You keep cars 5+ years.
- You drive a lot of miles.
- You want to customize the car or not worry about wear.
- You want no payment at all once the loan is paid off.
Before you sign either
- Know the price, not just the payment. Negotiate the car's price (the "capitalized cost" in a lease) first.
- Compare the lease's money factor (× 2,400 ≈ APR) with your loan APR.
- Check the mileage limit and per-mile charge.
- Make sure the payment fits: the how much car can I afford calculator uses the 20/4/10 rule. For a loan offer with fees, see the real APR with the personal loan calculator.
Keep the car payment in check
Vault is a personal finance dashboard with a "can I afford it" check that tests a new payment against your bills and goals. If you finance, Zero puts the car loan into a payoff plan with a debt-free date. Both have a free demo with sample data.
An estimate. Car values, interest and lease terms vary; read the contract before you sign.
Frequently asked questions
Is it better to lease or buy a car?
How do you compare a lease with a loan?
Why is a lease payment lower than a loan payment?
What extra costs come with a lease?
Can I buy my leased car at the end?
Does leasing make sense for a business?
Written by
Finance Specialist & Editor, VaultlyApps
Emma Whitfield writes and edits the VaultlyApps money guides and free calculators. Her focus is US household finance — budgeting on a real paycheck, paying down credit card and student debt, emergency funds and savings goals, renting — and the money side of freelancing and small-business income, from pricing and profit margins to self-employment tax. Every guide is researched against primary sources such as IRS publications and the CFPB, every number is checked in our tested calculators, and tax content is reviewed each year when new IRS figures come out. Emma is not a licensed financial adviser or tax preparer; her work is general education, not personal advice.
Researched against primary US sources, checked against independent calculators and reviewed by a finance expert on our team. Written for US readers — general education, not financial, tax or legal advice. Editorial policy · Disclaimer
