Lease vs Buy Car Calculator

Compare total cost of leasing vs buying a car. See which option saves more over the term.

By Konstantin Iakovlev · Updated September 2026 · Source: Federal Trade Commission — Financing or Leasing a Car

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Lease Terms

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Buy / Finance Terms

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Total Lease Cost

$14,600.00

Total Buy Cost

$21,382.09

Better Option

Buy

Save $49.19/mo

Lease Breakdown

Down Payment$2,000.00
Monthly Payments (36 mo)$12,600.00
Total Lease Cost$14,600.00
Cost Per Month of Use$405.56

Buy / Finance Breakdown

Down Payment$5,000.00
Loan Amount$30,000.00
Monthly Payment$573.03
Total Interest Paid$4,382.09
Total Payments$39,382.09
Less: Residual / Resale Value- $18,000.00
Net Buy Cost$21,382.09
Cost Per Month of Use$356.37

Use the Lease vs Buy Car Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only. Results are estimates based on the information you provide and the assumptions described on this page.

How It Works

Deciding between a lease and a purchase comes down to how the numbers line up against the way you actually drive, and this tool runs that comparison for your situation. The gap between the two paths can run into the thousands of dollars across a vehicle's life.

On the lease side, the calculator adds the down payment to the monthly payment times the lease term. On the buying side, it computes the loan payment on the price minus your down payment at your rate and term, adds the down payment to every loan payment, and subtracts the resale value you expect at the end of the loan. Because the two terms usually differ, it compares cost per month of use, each total divided by its own term. Fees, sales tax, insurance, maintenance, mileage charges and the return you could earn on the cash are not included, so account for them yourself where they differ between the two options.

Leasing usually rewards strong credit with the best rates, and the mileage cap is where lessees get burned: drive past the allowance and overage charges of $0.15-$0.30 per mile add up fast. Since most leases limit you to 10,000-15,000 miles a year, weigh your typical annual driving honestly, and set the comfort of staying under warranty against the equity you build by owning outright.

Comparing a $35,000 Car: 3-Year Lease vs. 5-Year Loan

  1. 1 Lease: $2,500 down and $399 a month for 36 months. Buy: $5,000 down on a $35,000 car, financing $30,000 at 6.5% for 60 months, with an expected resale value of $18,000 at the end of the loan.
  2. 2 Lease total: $2,500 + $399 × 36 = $16,864, or $468.44 per month of use.
  3. 3 Loan payment: $586.98 a month, or $35,219.07 over 60 months, of which $5,219.07 is interest. Buy total: $5,000 + $35,219.07 − $18,000 = $22,219.07, or $370.32 per month of use.
  4. 4 Buying comes out $98.13 a month cheaper here, but only if the car really fetches $18,000 after five years; at $12,000 the buy side rises to $470.32 a month and leasing edges ahead. Leasing still suits drivers who want a new car every three years and stay within the mileage allowance.

Source: Federal Trade Commission — Financing or Leasing a Car · Last updated: September 2026

Frequently Asked Questions

Is it cheaper to lease or buy a car?
Leasing has lower monthly payments but you own nothing at the end. Buying costs more monthly but builds equity. Over 10+ years of ownership, buying is almost always cheaper because you can drive the car payment-free for many years after it is paid off.
What happens at the end of a car lease?
You have three options: return the vehicle and walk away, purchase the car at the predetermined residual value, or trade it in for a new lease. Be aware of excess mileage charges (typically $0.15-0.25/mile) and wear-and-tear fees at return.
What are the downsides of leasing a car?
Mileage limits (typically 10,000-15,000/year), no ownership equity, potential excess wear fees, early termination penalties, and you always have a car payment. You also cannot modify the vehicle and must maintain it per the lease agreement.

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