Buy vs Lease Calculator
Compare buying vs leasing a vehicle. See total cost over a chosen horizon, monthly payment differences, break-even timeline, and equity impact.
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Default set to 12,000/year (common lease allowance).
Assumptions:
- Sales tax for buying is applied to the full vehicle price upfront.
- Sales tax for leasing is applied to the down payment plus total lease payments. Actual lease taxation varies by state—some tax only monthly payments, others tax the capitalized cost upfront, and some states exempt leases entirely.
- If lease buyout is selected, sales tax is applied to the residual (buyout) price. Actual buyout taxation varies by state.
- Depreciation uses an exponential decay model based on the annual rate provided.
- Insurance and maintenance costs are assumed constant over the comparison period.
Table of Contents
Buy vs Lease: The Key Differences
Compare buying vs leasing a vehicle. See total cost over a chosen horizon, monthly payment differences, break-even timeline, and equity impact.
How the Calculator Works
Compare buying vs leasing a vehicle. See total cost over a chosen horizon, monthly payment differences, break-even timeline, and equity impact.
When Buying Makes Sense
Compare buying vs leasing a vehicle. See total cost over a chosen horizon, monthly payment differences, break-even timeline, and equity impact.
When Leasing Makes Sense
Compare buying vs leasing a vehicle. See total cost over a chosen horizon, monthly payment differences, break-even timeline, and equity impact.
Frequently Asked Questions
It depends on your situation. Buying is better if you drive many miles, want to own the vehicle, or plan to keep it long-term. Leasing is better if you prefer lower monthly payments, like driving new cars every few years, and drive within mileage limits.
At the end of a lease, you typically have three options: return the vehicle and walk away, purchase it at the predetermined residual value, or trade it in for a new lease.
No. When you lease, you're essentially renting the vehicle. You make payments for the right to use it, but you don't build any equity or ownership interest.
The residual value is the estimated worth of the vehicle at the end of the lease term. It's predetermined by the lessor and used to calculate your lease payment.
Yes. Most leases include annual mileage limits (typically 10,000-15,000 miles). Exceeding the limit results in per-mile overage charges, usually $0.15-$0.25 per mile.