Lease vs Buy Car Comparison

Compare 36-mo lease total cost vs. 5-yr purchase + resale. Same out-of-pocket cash basis.

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How to use this calculator

  • Enter lease + buy terms.
  • Estimate resale at end of buy term (KBB/Edmunds).
  • Compare totals.

About this calculator

Lease vs. buy is mostly an asset-ownership question. Lease: lower monthly + always-new car + no resale hassle, but you own nothing at the end. Buy: higher monthly but you own the car and recover residual value at sale. Over 6+ years buying typically wins financially. Over 3 years lease is often cheaper. Lease usage limits (10-15k miles/yr) matter — over-mileage charges can be $0.20-0.30/mi.

Frequently asked

When does lease win?+
Short ownership horizons (3 years), high-mileage business use isn't needed, or you want to always drive new. Lower out-of-pocket monthly = better cash flow.
When does buy win?+
6+ year ownership, high mileage, want to modify, or want zero monthly after loan payoff.
Lease residual value?+
Set by manufacturer. Higher residual = lower lease payment. 50-60% residual at 36 mo is typical.
Money factor?+
Lease "interest rate" expressed as decimal: APR / 2400. 0.00125 money factor = 3% APR.
Lease buyout?+
Many leases let you purchase at residual at end. Sometimes good deal if used-car market is hot.

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