Auto Lease vs. Buy Calculator
Compare the total cost of ownership of leasing a car versus buying it with a loan. Factor in depreciation, interest charges, fees, and opportunity costs over the lease term.
Vehicle Inputs
Leasing Inputs
Financing / Buying Inputs
Opportunity Cost
Amortization Schedule
| Month | Lease Cumulative Paid | Lease Opp Cost | Buy Cumulative Paid | Buy Opp Cost | Vehicle Value | Buyer Equity |
|---|---|---|---|---|---|---|
| 1 | $4,308.75 | $19.00 | $5,684.82 | $25.00 | $39,500.00 | $4,995.24 |
| 2 | $4,817.50 | $40.54 | $6,369.64 | $53.42 | $39,006.25 | $4,999.41 |
| 3 | $5,326.25 | $64.63 | $7,054.46 | $85.27 | $38,518.67 | $5,012.44 |
| 4 | $5,835.00 | $91.26 | $7,739.28 | $120.54 | $38,037.19 | $5,034.29 |
| 5 | $6,343.75 | $120.44 | $8,424.10 | $159.24 | $37,561.72 | $5,064.88 |
| 6 | $6,852.50 | $152.16 | $9,108.92 | $201.36 | $37,092.20 | $5,104.15 |
| 7 | $7,361.25 | $186.42 | $9,793.74 | $246.91 | $36,628.55 | $5,152.05 |
| 8 | $7,870.00 | $223.23 | $10,478.56 | $295.87 | $36,170.69 | $5,208.52 |
| 9 | $8,378.75 | $262.58 | $11,163.38 | $348.27 | $35,718.56 | $5,273.49 |
| 10 | $8,887.50 | $304.47 | $11,848.20 | $404.08 | $35,272.08 | $5,346.92 |
| 11 | $9,396.25 | $348.91 | $12,533.02 | $463.33 | $34,831.18 | $5,428.74 |
| 12 | $9,905.00 | $395.89 | $13,217.84 | $525.99 | $34,395.79 | $5,518.91 |
How to Compare Leasing vs. Buying
To make a fair comparison, the calculator evaluates cash flows over the exact duration of the lease (e.g. 3 years). At the end of the term, the renter simply hands back the car, while the buyer is assumed to sell the car at its depreciated value and pay off any remaining loan balance.
- Lease Costs: Down payment (cap reduction), acquisition fees, monthly lease payments, and disposition fees.
- Buy Costs: Loan down payment, monthly loan payments, minus the depreciated resale value of the car (equity) at the end of the term.
- Opportunity Cost: Reflects the investment returns lost by paying more cash upfront or higher monthly outlays under one path vs. the other.
Frequently asked questions
Is it cheaper to lease or buy a car?
Buying is almost always cheaper in the long run because you build equity in the asset. Leasing has lower monthly payments and allows you to drive new cars with warranty coverage, but you have no asset value at the end of the term, and you pay rent charges and potential wear-and-tear/mileage fees.
What is the money factor in a lease?
The money factor represents the interest rate (or rent charge) on a car lease. You can convert the money factor into an equivalent Annual Percentage Rate (APR) by multiplying it by 2,400. For example, a money factor of 0.0025 equals a 6% APR.
What is vehicle residual value?
Residual value is the lender's estimate of what the vehicle will be worth at the end of the lease term. A higher residual value results in lower monthly lease payments because you are paying for less vehicle depreciation over the lease term.