Lease vs Buy Car Calculator

Lease vs Buy: Which Is Better?

Buying is almost always cheaper long-term because you build equity and can sell the car. Leasing offers lower monthly payments and a new car every 2-3 years, but you never own the vehicle and face mileage limits and wear-and-tear fees.

When Leasing Makes Sense

If you want a new car every 3 years, drive under 12,000-15,000 miles/year, want lower monthly payments, and don't mind never owning the car.

When Buying Makes Sense

If you plan to keep the car 5+ years, drive high miles, want to customize the vehicle, or want to eliminate car payments eventually.

The Financial Difference

When you buy, you build equity and eventually own the vehicle outright. When you lease, you pay for the vehicle's depreciation during the lease term (typically 2-3 years) plus interest (called the "money factor"). At lease end, you return the car with nothing to show for your payments — unless you exercise the purchase option.

When Leasing Makes Financial Sense

Leasing can be smart if you need a new car every 2-3 years for business (tax-deductible lease payments), you want lower monthly payments and aren't concerned with ownership, the vehicle depreciates slowly (holding value well), and you drive under 10,000-15,000 miles/year.

When Buying Is Better

Buying wins financially over time because once you pay off the loan, you drive payment-free. If you keep a car for 8-10 years, the total cost of ownership is dramatically less than serial leasing. A 3-year-old certified pre-owned vehicle is often the sweet spot: someone else absorbed the steep initial depreciation, and you get modern features with years of reliable driving ahead.

Total Cost Comparison

Over 10 years: Leasing three 3-year leases at $400/month = $144,000 with no asset at the end. Buying a $35,000 car with a 5-year loan at $650/month = $39,000 total (plus $3,000 interest), then 5 years payment-free with a car still worth $8,000-12,000.

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