Lower monthly payments vs. actual ownership. Enter the details for the car you're considering and see the true cost of each option over the same period.
Enter details for the same car under both scenarios — the calculator compares them over the lease term so you're comparing apples to apples.
Tip: search your car's make, model, year and mileage on KBB to find a realistic resale value.
💡 Comparing over 3 years — the length of the lease term. After 3 years the buyer still owns the car; the lessee hands it back.
The buy vs. lease question is really about what you value most: lower monthly payments now, or true ownership and lower total cost over time. Leases are designed to look attractive — the monthly payment is lower because you're only paying for the depreciation during the lease term, not the full car. But at the end of the lease you hand the car back and own nothing. This calculator compares the total cost of both options over the same period so you can see what each choice actually costs.
Over a typical 3-year lease term, buying often costs more month-to-month but you own an asset worth $20,000–25,000 at the end. The lessee has lower monthly payments but walks away with nothing after paying thousands in lease costs. Whether buying or leasing wins financially depends on your specific numbers — vehicle price, interest rate, lease payment, insurance, and how long you'd keep a purchased car.
Leasing genuinely makes sense in some situations: if you want a new car every 2–3 years, if you drive under the mileage limit, if your employer reimburses lease payments, or if the manufacturer is heavily subsidizing the lease. This calculator helps you see your specific numbers clearly so the decision is based on math rather than whatever the dealership tells you.
Residual value is what your car is worth at the end of the comparison period — in this calculator the length of the lease term. It matters enormously for the buy vs lease comparison because buying a car means you own an asset with real value at the end. A car worth $19,000 after 3 years means your true net buying cost is $19,000 less than the total payments you made. Leasing leaves you with nothing. We recommend looking up your specific car on Kelley Blue Book for the most accurate residual estimate.
Leasing can make financial sense in specific situations: if your employer reimburses lease payments as a business expense, if you drive significantly under the mileage allowance, if the manufacturer is heavily subsidizing the lease with a low money factor (the lease equivalent of interest rate), or if you genuinely need a new car every 2–3 years for professional reasons. In most personal use scenarios over 5+ years, buying and keeping a car costs less.
The money factor is the interest rate component of a lease, expressed as a small decimal like 0.00125. Multiply by 2,400 to convert to an approximate APR — so 0.00125 × 2,400 = 3% APR equivalent. A low money factor means the manufacturer is subsidizing your lease heavily, which makes leasing more competitive against buying. Always ask the dealer for the money factor before signing a lease.
At the end of a lease you return the car and owe nothing more assuming you stayed within the mileage limit and the car has no excess wear. You can then start a new lease, buy a different car, or purchase the leased car for the predetermined residual price. There is no equity, no asset, and no payment-free period — you must immediately take on a new payment if you need a vehicle.
Most leases allow 10,000–15,000 miles per year and charge $0.15–0.30 per mile over the limit. If you drive 20,000 miles per year on a 12,000-mile lease, you owe $1,200–2,400 in overage charges at the end — significantly increasing the true lease cost. High-mileage drivers almost always find buying more economical than leasing.