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Lease vs Buy Calculator - Auto

Make the smartest financial decision for your next vehicle. Compare leasing vs buying with comprehensive cost analysis.

Vehicle Information

Lease Terms

APR: 3.00%

$18,150

Purchase Terms

15.2% down

Lease Option

Monthly Payment:$0
Due at Signing:$3,500
Total Payments:$0
Excess Mileage:$0
Insurance Cost:$0
Total Cost:$0

Buy Option

Monthly Payment:$0
Down Payment:$5,000
Total Interest:$0
Insurance Cost:$0
Maintenance:$4,000
Total Cost:$0
Car Value:$0

5-Year Analysis

Lease Cost:$0
Buy Cost:$0
Buy Equity:-$0
Net Difference:$0

Advantages

    Disadvantages

      Lease vs Buy: Making the Right Choice

      The decision to lease or buy a car is one of the most important financial choices you'll make. Each option has distinct advantages and disadvantages that depend on your financial situation, driving habits, and personal preferences.

      Understanding Car Leasing

      When you lease a car, you're essentially renting it for a fixed period, typically 2-4 years. You pay for the vehicle's depreciation during the lease term, plus interest (money factor) and fees. At the end of the lease, you return the car or have the option to purchase it at the predetermined residual value.

      Key Lease Terms Explained:

      • Money Factor: The lease equivalent of interest rate. Multiply by 2400 to get APR equivalent
      • Residual Value: The car's estimated value at lease end, expressed as a percentage of MSRP
      • Acquisition Fee: Administrative fee charged at lease inception (typically $500-$1,000)
      • Disposition Fee: Fee for returning the vehicle at lease end (typically $300-$500)
      • Capitalized Cost: The negotiated price of the vehicle for lease purposes

      Financial Comparison Factors

      FactorLeasingBuying
      Monthly PaymentLower (30-60% of purchase payment)Higher
      Down PaymentUsually lower or noneTypically 10-20%
      MileageLimited (10k-15k/year typical)Unlimited
      EquityNoneBuilds over time

      Who Should Lease?

      Leasing makes sense if you:

      • Want lower monthly payments
      • Enjoy driving newer cars with latest technology
      • Drive less than 10,000-12,000 miles per year
      • Don't want to deal with selling or trading
      • Have good credit (typically 700+ score)
      • Want to always be under warranty

      Who Should Buy?

      Buying makes sense if you:

      • Want to build equity in an asset
      • Drive more than 15,000 miles per year
      • Plan to keep the car for 5+ years
      • Want freedom to modify the vehicle
      • Can afford higher monthly payments
      • Don't mind handling maintenance and repairs

      Ready to Make Your Decision?

      Use our calculator to see which option saves you the most money based on your specific situation.