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Car Leasing vs Buying Calculator

Total cost of ownership comparison with payments, residuals, fees, chart & year-by-year breakdown

📋 Vehicle & Financing Details

Lease payment ≈ (Cap − Residual)/n + (Cap + Residual) × MF
📅 Comparison Term (drives both sides)
mo
Both options are evaluated over this exact period.
mi
$
$
$
$
Leases often include routine maintenance; adjust if yours does not.
🛒 Buying Inputs
$
$
mo
%
%
$
Registration, documentation, destination, etc.
$
≈ 45.0% of purchase price
📝 Leasing Inputs
$
$
%
Percentage of MSRP. Residual $ updates automatically.
$
You can override the $ amount; % will recompute.
Typical range 0.0008–0.003. Approx APR ÷ 2400.
$
$
$
mi
$

📊 Results – Total Cost of Ownership

Total Cost – Buy
—
Total Cost – Lease
—
Difference / Savings
—
Effective Monthly – Buy
—
Effective Monthly – Lease
—
💡 Recommendation
Lower Total Cost Option
—
You Save
—
Adjust inputs to see which option has the lower total cost of ownership over the selected term.
Buy Cumulative TCO
Lease Cumulative TCO

📅 Year-by-Year Breakdown

Year Buy Outflow Buy Cumul. Lease Outflow Lease Cumul. Diff (Buy−Lease)
Adjust inputs to see results

How to Use the Car Leasing vs Buying Calculator

This free Total Cost of Ownership (TCO) calculator compares the true cost of leasing versus buying a vehicle over the same period. It includes purchase or lease payments, residual/resale value, fees, insurance, maintenance and excess mileage charges, then shows an interactive cumulative chart and year-by-year breakdown so you can see which option is cheaper under your assumptions.

Step-by-Step Guide

1. Set the Comparison Term & Shared Costs

The Lease / Comparison Term (months) is the single period used for both options. Enter expected annual mileage, then set annual insurance and maintenance for each path (they often differ).

2. Enter Buying Details

3. Enter Leasing Details

4. Interpret the Results

Results update live. Key metrics:

5. Chart & Table

The chart shows cumulative cash outflows for both options. The year-by-year table breaks down annual outflows, running totals and the running difference.

Lease payment formula: (Cap − Residual) / n + (Cap + Residual) × Money Factor

Common Scenarios & Examples

Scenario: 3-Year High-Mileage Driver

Goal: Decide whether a short-term lease or a financed purchase is cheaper when annual mileage is high.

  1. Set Lease / Comparison Term to 36 months.
  2. Raise Expected Annual Mileage to 18 000 (or higher).
  3. Keep residual values realistic for a 3-year-old car.
  4. Compare Total Cost and the excess-mileage impact on the lease side.
Typical observation:

High mileage often tips the scale toward buying once excess-mile charges and the residual credit on the buy side are taken into account.

Scenario: Keep the Car Longer Than the Lease Term

Goal: See the effect of ownership beyond a typical 36-month lease.

  1. Increase the comparison term (and therefore the lease term) or note that after a lease ends you would need a new vehicle.
  2. Raise the buy residual or extend the loan payoff analysis.
  3. Observe how the residual value on the buy side becomes a larger credit the longer you keep the car.
Typical observation:

Buying usually becomes more attractive the longer you keep the vehicle, because you retain equity while lease payments stop producing ownership.

Disclaimer & Limitations

Not Professional Advice: This calculator is an educational estimation tool only and does not constitute financial, tax or legal advice. Actual costs vary by location, dealer incentives, credit score, insurance quotes and market residual values. Consult a qualified advisor for decisions that affect you.

Assumptions: Sales tax is applied to the purchase price on the buy side. Lease monthly payments are calculated with the standard money-factor formula; local lease tax treatment may differ. Fuel costs are assumed equal and omitted. Insurance and maintenance are user-editable annual figures. Residual values are estimates you provide. Early termination, gap insurance, wear-and-tear charges and manufacturer incentives are not modelled.

Estimation Purposes Only: The chart and table illustrate relative cash flows under the inputs you supply. Real-world portfolios experience price changes, rate changes and unexpected repairs not fully captured here.

Bug Reports and Suggested Improvements

Please email all suggestions for improvements and any bug reports to: carleasevsbuycalc@personalfinances.me, thank you.