acalculator

Lease vs buy car: which costs less?

Type the lease terms, then the price, down payment, loan rate and length, and what the car will be worth when the lease would end. The lease vs buy car calculator compares the net cost of each choice over the lease months and shows which costs less.

Your numbers

Type the APR you are offered.
The cheaper choice saves
$1,673.57

Leasing costs $1,673.57 less over 36 months: leasing costs $19,600.00 and buying $21,273.57.

Cheaper choice
Leasing
Net cost of leasing
$19,600.00
Net cost of buying
$21,273.57
Monthly loan payment
$673.24
Loan payments in the lease months
$24,236.67
Loan balance left
$15,036.90
Equity in the car
$6,963.10

The cheaper choice saves: $1,673.57. Leasing costs $1,673.57 less over 36 months: leasing costs $19,600.00 and buying $21,273.57.

The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use

How to calculate

Compares the net cost of leasing a car with buying it on a loan over the same months: lease payments and fees against the loan payments and balance, less what the car is worth at the end.

Example with the default inputs (Lease term (months) 36, Due at lease signing $3,000.00, Monthly lease payment $450.00, End-of-lease fees $400.00, Purchase price $38,000.00, Down payment $4,000.00, Loan rate (APR) 7%, Loan length (months) 60, Car’s value at the end of the lease term $22,000.00): Leasing costs $1,673.57 less over 36 months: leasing costs $19,600.00 and buying $21,273.57.

Method: lease = due at signing + payment × months + end fees; buy = down + loan payment × min(months, loan months) + balance left − value at the end; loan payment = (price − down) × r ÷ (1 − (1 + r)^−n), r = APR ÷ 1200.

  • Both choices are compared over the lease months. After that you return the leased car, or own the bought one worth its value then.
  • Money paid at different times is added at face value; the interest you could earn on cash (the time value of money) is not counted.
  • Insurance, maintenance and registration are left out; they are often similar either way.
  • Type the payments, APR and value you expect; no live rates or prices.

Machine-readable copies: Markdown, JSON.

Worked examples

Each example is checked against the calculator on every build.

  1. Lease term (months) 36, Due at lease signing $3,000.00, Monthly lease payment $450.00, End-of-lease fees $400.00, Purchase price $38,000.00, Down payment $4,000.00, Loan rate (APR) 7%, Loan length (months) 60, Car’s value at the end of the lease term $22,000.00 gives Net cost of leasing $19,600.00, Monthly loan payment $673.24, Loan balance left $15,036.90, Net cost of buying $21,273.57, The cheaper choice saves $1,673.57, Cheaper choice Leasing.Source: Consumer Financial Protection Bureau, What should I know about leasing versus buying a car? https://www.consumerfinance.gov/ask-cfpb/what-should-i-know-about-leasing-versus-buying-a-car-en-815/ (retrieved 2026-10-05); Board of Governors of the Federal Reserve System, Keys to Vehicle Leasing: Leasing vs. Buying, using lease-vs.-buy models (time value of money, future value of the vehicle), https://www.federalreserve.gov/pubs/leasing/resource/different/models.htm (retrieved 2026-10-05)
  2. Lease term (months) 36, Due at lease signing $2,000.00, Monthly lease payment $450.00, End-of-lease fees $400.00, Purchase price $30,000.00, Down payment $5,000.00, Loan rate (APR) 4%, Loan length (months) 48, Car’s value at the end of the lease term $21,000.00 gives Net cost of leasing $18,600.00, Monthly loan payment $564.48, Loan balance left $6,629.21, Net cost of buying $10,950.36, Cheaper choice Buying.Source: Consumer Financial Protection Bureau, What should I know about leasing versus buying a car? https://www.consumerfinance.gov/ask-cfpb/what-should-i-know-about-leasing-versus-buying-a-car-en-815/ (retrieved 2026-10-05)
  3. Lease term (months) 24, Due at lease signing $0.00, Monthly lease payment $500.00, End-of-lease fees $0.00, Purchase price $24,000.00, Down payment $0.00, Loan rate (APR) 0%, Loan length (months) 24, Car’s value at the end of the lease term $12,000.00 gives Net cost of leasing $12,000.00, Monthly loan payment $1,000.00, Loan balance left $0.00, Net cost of buying $12,000.00, The cheaper choice saves $0.00, Cheaper choice Neither: they cost the same.

How it works

Both choices are compared over the lease term of m months.

  • Net cost of leasing = due at signing + monthly lease payment × m + end-of-lease fees, in exact decimals.
  • Amount borrowed L = price − down payment (the down payment cannot be more than the price).
  • Monthly loan payment P = L × r ÷ (1 − (1 + r)^−n), r = APR ÷ 1200, n loan months (L ÷ n at 0%).
  • Loan payments in the lease months = P × k, with k = the smaller of m and n.
  • Loan balance left after k payments = L × (1 + r)^k − P × ((1 + r)^k − 1) ÷ r (L − P × k at 0%; 0 when k = n).
  • Net cost of buying = down payment + P × k + balance left − the car’s value at the end of the lease months.
  • Equity in the car = value − balance left.
  • The cheaper choice saves = |leasing − buying|; within half a cent they cost the same.

Rules

  • Lease 1 to 72 months; loan 1 to 96 months; APR 0% to 40%.
  • Insurance, maintenance, registration and the interest you could earn on cash are not included.

Worked examples by hand

The default: 36-month lease at $450 with $3,000 at signing and $400 at the end, against a $38,000 car with $4,000 down at 7% over 60 months, worth $22,000 after 3 years. Leasing = 3,000 + 450 × 36 + 400 = $19,600. P = 34,000 at 7% over 60 months = $673.24; 36 payments = $24,236.67; balance left $15,036.90. Buying = 4,000 + 24,236.67 + 15,036.90 − 22,000 = $21,273.57. Leasing saves $1,673.57.

A car that keeps its value: $30,000, $5,000 down, 4% over 48 months, worth $21,000; lease $2,000 + 36 × $450 + $400. Leasing = $18,600. P = $564.48; balance left after 36 payments $6,629.21; buying = 5,000 + 20,321.15 + 6,629.21 − 21,000 = $10,950.36. Buying saves $7,649.64.

At 0%: a 24-month lease at $500 against a $24,000 car paid over 24 months, worth $12,000. Leasing = $12,000; buying = 24 × 1,000 − 12,000 = $12,000; they cost the same.

Other questions people ask

How do you compare leasing and buying a car?

Over the same months. Leasing costs what you pay at signing, the monthly payments and the end-of-lease fees. Buying costs the down payment and the loan payments, plus the loan balance still owed, minus what the car is worth; that value is yours.

Why does the car’s future value matter so much?

When you buy, you keep the car. If it holds its value, buying usually costs less; if it loses value fast, leasing can. In the default example the car is worth $22,000 after 3 years.

Is leasing cheaper per month?

Usually the payment is lower, because you pay for the car’s expected loss of value and a rent charge, not the whole price. The CFPB notes that you do not own the car at the end of a lease.

What end-of-lease fees should I add?

The disposition fee, and any charges you expect for miles over the limit or excess wear. Your lease lists them.

Does the calculator count the time value of money?

No. Payments made at different times are added at face value. The Federal Reserve’s leasing guide notes that simple models leave this out; with low rates it matters little.

What if the loan is longer than the lease?

The calculator counts only the loan payments made during the lease months, then adds the balance still owed, as if you sold the car and paid off the loan.