Lease vs Buy Calculator
Common Details
Buying Specifics
Leasing Specifics
Financial Recommendation
You save approx. $0 over 36 months.
Cost of Buying
Cost of Leasing
Lease vs. Buy: Which is Right for You?
The decision to lease or buy a car is one of the most common financial dilemmas for car shoppers. There is no "one size fits all" answer. The right choice depends on your financial priorities, driving habits, and how long you plan to keep the vehicle.
Our **Lease vs. Buy Calculator** helps you make an objective comparison by looking at the Net Cost of ownership over a specific period (usually the lease term, e.g., 36 months). This takes into account not just the monthly payments, but also the equity you build when buying versus the walk-away nature of leasing.
How the Math Works
To fairly compare the two, we look at what you spend versus what you get back:
- Buying Cost: You pay a down payment, monthly loan payments, and maintenance. However, at the end of the term, you own an asset (the car) that you can sell. The calculator subtracts this resale value from your total expenses to find your Net Cost.
- Leasing Cost: You pay a down payment (if any), monthly lease payments, and fees. At the end, you return the car and have nothing to show for it financially. Your Net Cost is simply the total cash outflow.
When Buying Strategy Wins
Buying is typically the smarter financial move if you keep your cars for a long time (5+ years). Once the loan is paid off, your monthly car payment drops to zero, and you can drive "payment-free" for years.
Choose Buying If:
- You drive a lot (over 15,000 miles/year).
- You like to modify or customize your car.
- You plan to keep the car for more than 4-5 years.
- You want to build equity.
When Leasing Strategy Wins
Leasing appeals to drivers who want the latest technology, safety features, and prestige of a new car without the long-term commitment. It offers lower monthly cash flow requirements but is often more expensive in the long run.
Choose Leasing If:
- You want lower monthly payments.
- You enjoy driving a new car every 2-3 years.
- You don't want to worry about out-of-warranty repairs.
- You drive predictable miles (under 12k/year).
Frequently Asked Questions
Is it cheaper to lease or buy?
In the short term (3 years), leasing usually offers lower monthly payments. However, buying is almost always cheaper in the long run (5-10 years) because you eventually own the asset and stop making payments while continuing to use it.
Are lease payments tax deductible?
For personal use, generally no. However, if you lease a car for business purposes, you may be able to deduct a portion of the payment. Consult a tax professional for advice specific to your situation.
What is the "Disposition Fee"?
This is a fee charged by the leasing company at the end of the lease to cover the cost of cleaning and re-selling the returned vehicle. It is usually $300-$500 but can sometimes be waived if you lease another vehicle from the same brand.