Lease vs. Buy Calculator

How to calculate Lease vs Buy calculator?

This tool compares the full cost of purchasing a vehicle versus leasing it over the selected terms so you can see which option is less expensive.

Core formula: Total Purchase Cost = down_payment + (monthly_purchase_payment × loan_term_months) + total_purchase_ongoing_costs − estimated_resale_value; Total Lease Cost = lease_down_payment + (monthly_lease_payment × lease_term_months) + total_lease_ongoing_costs; Difference = Total Purchase Cost − Total Lease Cost

Using the Lease vs Buy calculator calculator: an example

Example inputs: vehicle price $35,000; purchase down payment $5,000; loan 60 months. Lease: cap cost $32,000; residual $18,000; lease term 36 months.

Step-by-step calculation:

• Calculate monthly purchase payment. Example: $35,000 price, $5,000 down, 5% APR, 60 months → ≈ $530/month.
• Compute total purchase cost: $5,000 down + ($530 × 60 = $31,800) + ongoing costs (example $300/month × 60 = $18,000) − estimated resale (example $12,000) → ≈ $42,800 total purchase cost.
• Calculate monthly lease payment. Example: cap cost $32,000, residual $18,000, money factor 0.002, 36 months → depreciation $14,000/36 ≈ $389 + finance (32,000+18,000)*0.002 ≈ $100 → ≈ $489/month.
• Compute total lease cost: $1,000 down + ($489 × 36 = $17,604) + ongoing costs (example $200/month × 36 = $7,200) → ≈ $25,804. Compare totals: $42,800 − $25,804 ≈ $16,996 (purchase more expensive in this example).

Frequently Asked Questions

Does the calculator include taxes and fees?

You can include sales tax where provided; add registration or one-time fees separately for a complete comparison.

How should I estimate resale or residual value?