Lease vs Buy Calculator
Compare the true cost of leasing versus buying a car, including money factor, resale value and over-mileage charges.
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- Lease payment / month
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- Total cost of leasing
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- Loan payment / month
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- Net cost of buying
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| Item | Lease | Buy |
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How it works
The lease side uses the standard money-factor formula every dealer worksheet is built on.
The residual value is MSRP × residual %, the adjusted capitalized cost is the
negotiated price minus your cash down, and the money factor is APR ÷ 2400. The
base payment is then the depreciation fee (adjusted cap cost − residual) ÷ term
plus the rent charge (adjusted cap cost + residual) × money factor. Sales tax is
applied on top of that monthly payment, and the acquisition fee, disposition fee and any
over-mileage charges are added to the total.
The buy side finances the price plus sales tax, minus your down payment, with the ordinary
amortization formula M = P · r ÷ (1 − (1 + r)⁻ⁿ). Because a bought car is still
worth something at the end, the calculator credits you its resale value and subtracts any
loan balance you still owe at that point — that equity is the piece most lease-versus-buy
comparisons quietly ignore. Everything runs in your browser as you type: no sign-up, no ads,
and none of your numbers ever leave the page.
Assumptions: sales tax is charged on the monthly payment when you lease and on the full purchase price when you buy (the most common US rules — a few states differ). Both options are compared over the length of the lease, and figures are plain cash totals, not discounted to present value. Insurance, fuel and maintenance are left out because they are broadly the same either way.
Frequently asked questions
Is it cheaper to lease or buy a car?
It depends almost entirely on three numbers: the residual value, the money factor and how long you keep the car. Over a single 3-year term leasing often looks cheaper because you only pay for the depreciation you use, but buying wins as soon as you count the resale value you keep at the end and then keep driving the car with no payment. This calculator shows both totals over the same period so you can see which way your own numbers fall.
How is a car lease payment calculated?
The dealer worksheet has two halves. The depreciation fee is (adjusted capitalized cost minus residual value) divided by the term, and the rent charge is (adjusted capitalized cost plus residual value) times the money factor, where the money factor is the APR divided by 2400. Add the two for the base payment, then add sales tax on top of it in most US states. This tool does all of that and shows the money factor it derived from the APR you entered.
Does the calculator account for the car's resale value?
Yes, and it is the part most comparisons leave out. When you buy, the car is still an asset at the end of the comparison period, so the tool credits you its estimated resale value and subtracts any loan balance you still owe at that point. That net figure is compared against the total cost of the lease, which includes cash at signing, every payment, the acquisition and disposition fees and any over-mileage charges.