# Lease vs buy car: which costs less?

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.

- Page: https://www.acalculator.org/finance/lease-vs-buy-calculator
- JSON spec: https://www.acalculator.org/finance/lease-vs-buy-calculator.json
- Version: 35e100324c3b

## Default answer

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.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| months | Lease term (months) | The length of the lease; both choices are compared over these months. |
| signing | Due at lease signing | The cash due when you sign the lease: down payment, first payment and fees. |
| leasePay | Monthly lease payment | The monthly lease payment with tax. |
| endFees | End-of-lease fees | The disposition fee, plus any expected excess-mileage or wear charges. |
| price | Purchase price | What the car costs to buy, with tax and fees. |
| down | Down payment | The cash you pay up front when you buy. |
| rate | Loan rate (APR) | The yearly rate of the car loan. The monthly rate is this ÷ 12. |
| loanMonths | Loan length (months) | The number of monthly loan payments. |
| resale | Car’s value at the end of the lease term | What the car you bought would be worth after the lease months, for example its trade-in value. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| saving | The cheaper choice saves | The difference between the two net costs. |
| better | Cheaper choice | Leasing or buying, whichever costs less. |
| leaseCost | Net cost of leasing | Due at signing + monthly payments × months + end-of-lease fees. |
| buyCost | Net cost of buying | Down payment + loan payments in those months + loan balance left − car’s value. |
| buyPay | Monthly loan payment | (Price − down payment) × r ÷ (1 − (1 + r)^−n). |
| paid | Loan payments in the lease months | Monthly loan payment × the lease months (or the loan length if shorter). |
| owed | Loan balance left | What you still owe on the loan at the end of the lease months. |
| equity | Equity in the car | Car’s value − loan balance left. |

## 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.

## Assumptions

- 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.

## Worked examples

1. months = 36, signing = $3,000.00, leasePay = $450.00, endFees = $400.00, price = $38,000.00, down = $4,000.00, rate = 7%, loanMonths = 60, resale = $22,000.00 gives leaseCost = $19,600.00, buyPay = $673.24, owed = $15,036.90, buyCost = $21,273.57, saving = $1,673.57, better = 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. months = 36, signing = $2,000.00, leasePay = $450.00, endFees = $400.00, price = $30,000.00, down = $5,000.00, rate = 4%, loanMonths = 48, resale = $21,000.00 gives leaseCost = $18,600.00, buyPay = $564.48, owed = $6,629.21, buyCost = $10,950.36, better = 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. months = 24, signing = $0.00, leasePay = $500.00, endFees = $0.00, price = $24,000.00, down = $0.00, rate = 0%, loanMonths = 24, resale = $12,000.00 gives leaseCost = $12,000.00, buyPay = $1,000.00, owed = $0.00, buyCost = $12,000.00, saving = $0.00, better = Neither: they cost the same.

## FAQ

### 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.

## Sources

- 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: using lease-vs.-buy models. https://www.federalreserve.gov/pubs/leasing/resource/different/models.htm (retrieved 2026-10-05)