Auto Lease vs Buy Calculator
Compare the real total cost of getting a car by leasing versus financing. This tool rolls up monthly payments, taxes and fees, expected depreciation, mileage charges, and end-of-term costs or equity so you can see the bottom-line difference over the same time horizon. It’s helpful when you’re choosing between offers, budgeting for a specific mileage need, or deciding how long you plan to keep the vehicle.
The auto lease vs buy calculator lets you test scenarios—adjust term lengths, money factor or APR, down payment, incentives, residual value, and annual miles—and immediately see how those choices affect monthly cash flow and lifetime cost. The goal is to surface the break-even point, highlight the trade-offs (lower payments and warranty coverage with leasing versus long-run savings and ownership with buying), and help you pick the option that best fits your driving habits and budget.
Compare the total cost of leasing versus financing over the same time frame. We’ll show monthly payments, total cost over the lease term, and the break-even month where buying becomes cheaper than leasing (or vice versa).
We compare leasing and financing head to head over the same horizon (the lease term). Set your inputs and we’ll show monthly payments, total cost over the lease period, and the earliest break-even month.
Buy horizon cost = payments over the lease term + remaining balance − estimated resale value at that time (using residual% of MSRP).
Results interpretation
How it works
We use textbook lease and loan math, comparing costs over an identical time window so the decision is apples to apples.
Formulas, assumptions, limitations
Lease payment. Depreciation = (Cap cost − Residual) ÷ Lease months; Rent = (Cap cost + Residual) × Money factor; Monthly = Depreciation + Rent.
Residual value. Residual = MSRP × Residual%. Miles/yr is an assumption baked into the lessor’s residual table.
Loan payment. Standard amortization at APR over loan term (months).
Buy horizon cost. Payments (first N months) + Remaining balance − Resale value at month N (linear to residual at lease end).
Break-even. Smallest month N where Buy cost ≤ Lease cost.
Scope. Model excludes taxes, fees, incentives, disposition, DMV, and insurance to keep comparisons clean.
Use cases & examples
A 64% residual and 0.0019 MF often make leasing attractive. We see lower lease monthly and a positive buy-vs-lease difference.
At 3.49% APR for 72 months, buy monthly narrows. Over a 36-month horizon, buying can catch up if resale value holds.
Bumping miles/yr typically lowers residual in real offers. Here, we simulate that by reducing residual% and observing the shift.
Auto lease vs buy FAQs
How do we convert money factor to APR?
A quick estimate is APR ≈ MF × 2400. For MF 0.0025, APR ≈ 6%.
Does miles per year change the math here?
Indirectly. The residual% you enter should already reflect the mileage allowance in your quote.
Why compare over the lease term?
It aligns time horizons: lease ends at that month, so we measure buying over the same period for fairness.
What about taxes and fees?
They vary widely by state and deal structure. Add them to both scenarios to refine the comparison.
What if I plan to keep the car after the lease term?
Extend the horizon by increasing the lease months input or model a lease buyout as a separate step.
Is cap cost the same as MSRP?
No. Cap cost is your negotiated selling price for the lease. MSRP is the sticker price used to compute residual.
Lease or buy? We turn both into the same yardstick
Car decisions are messy because lease offers and loan quotes talk past each other. Leasing emphasizes a monthly payment tied to a residual and a money factor. Financing emphasizes APR and a term. We normalize both paths to the same time window and the same value model so we can make a confident choice.
Why residuals matter
Leasing outsources resale risk to the lessor: they project the car’s future value as a percentage of MSRP. A strong residual and a low money factor can produce an attractive monthly payment. When we buy, we carry resale risk ourselves. Using the same residual as a proxy for value at the horizon lets us compare like-for-like.
The lease payment formula in plain language
Every lease payment has two pieces. The depreciation portion repays the difference between the starting value (cap cost) and the expected end value (residual) over the lease months. The rent charge is effectively interest on the average of those two values. Add them together and you’ve got the base monthly payment.
Financing math and horizon cost
Loan payments are level. Over a shorter horizon than the full loan, we’ll still owe a remaining balance. If we sold the car then, our net cost would be the payments we’ve made plus the payoff, minus what the car sells for. That expression simplifies neatly to “depreciation + interest” over the horizon.
How we use this tool
- Plug in the real numbers from the dealer worksheet (cap cost, MF, residual%).
- Use your preapproved loan APR and a realistic term.
- Compare the totals over the lease period; watch the break-even month.
- Sensitivity test: nudge MF, residual, APR, and cap cost to see which lever moves the result most.
Practical tips
- Negotiate cap cost for lease just like a purchase price.
- Confirm the money factor and whether you qualify for the buy rate (no markups).
- Match residual% to the mileage you expect to drive.
- Include taxes, acquisition/disposition, and doc fees when you finalize.
Bottom line
There isn’t a universal winner. Strong residuals and cheap money favor leasing; low APRs and long terms favor buying. When both paths are translated into the same time window, our decision stops being a guess and becomes a plan.