Free buy vs lease calculator
Enter loan and lease details for the same vehicle — this buy vs lease calculator totals the 3-year cost of each option including resale value so you can see which puts less money out of pocket, updated live, as you type.
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Does not include sales tax, insurance, maintenance, or mileage penalties. Actual costs depend on usage and market conditions.
Results are estimates. Consult a professional.
How the buy vs. lease calculator works
This calculator computes the true out-of-pocket cost of buying a vehicle versus leasing it over the same period. Buying factors in your down payment, total loan payments, and the estimated resale value you'll recover when you sell. Leasing factors in drive-off costs, total monthly payments, and any disposition fee at lease end. The option with the lower total is the cheaper choice for the period modeled.
Resale value is typically expressed as a percentage of the original MSRP. A $35,000 sedan that retains 55% of its value after three years returns $19,250 to the buyer — a major offset. Lease residuals are set by the manufacturer's captive finance arm and are not negotiable.
Edmunds True Cost to Own® methodologyWorked example: $35,000 sedan over 36 months
Buy: $3,500 down (10%), $619/mo at 5.9% APR × 36 months, 55% resale ($19,250). Lease: $1,500 drive-off, $399/mo × 36 months, $395 disposition fee.
3-year cost comparison for a $35,000 vehicle
The table below compares buy vs. lease total out-of-pocket costs under common financing assumptions. Buy scenario: 10% down, 5.9% APR, 55% resale. Lease scenario: $1,500 drive-off, money factor 0.0025, $395 disposition fee.
| Cost Component | Buy | Lease |
|---|---|---|
| Down payment / Drive-off | $3,500 | $1,500 |
| Monthly payment | $619/mo | $399/mo |
| Total payments (36 mo) | $22,284 | $14,364 |
| Disposition fee | — | $395 |
| Resale value recovered | −$19,250 | — |
| Net 3-year cost | $6,534 | $16,259 |
Source: Edmunds 2024; assumes 12,000 miles/year, good credit tier.
Tips for the buy vs. lease decision
The math only tells part of the story. Your driving habits, tax situation, and how long you keep vehicles all shift the outcome significantly.
- High-mileage drivers should buy — Lease contracts typically cap you at 10,000–15,000 miles per year. Every excess mile costs $0.15–$0.25, making leases punishingly expensive if you drive more than 15,000 miles annually.
- Get GAP coverage on a lease — If your leased vehicle is totaled, your auto insurance pays current market value, which may be less than what you owe. GAP insurance (often $300–$500 for the lease term) covers the difference.
- Negotiate the capitalized cost, not just the payment — On a lease, the cap cost is the selling price of the car. Dealers may mark it above MSRP. Push it down just as you would in a purchase negotiation.
- Business use can favor leasing — Self-employed individuals and business owners may deduct the business-use portion of lease payments directly, often more advantageously than depreciation deductions on a purchase.
- Factor in the end-of-lease option — Most leases include a purchase option at a predetermined residual price. If the market value exceeds the residual, buying out the lease can be a bargain — especially valuable in tight used-car markets.
Accuracy and limitations
Resale value is the biggest wildcard in this model. Actual resale varies by trim level, color, mileage, accident history, and prevailing market conditions. The calculator uses your entered percentage as a straight-line estimate; real depreciation is steepest in years one and two. Sources like Edmunds, Kelley Blue Book, and Black Book offer more precise residual projections for specific vehicles.
The model does not include sales tax (varies by state and whether it's applied to the full price or monthly payments), registration fees, insurance cost differences, or maintenance costs. Some states tax the full vehicle sale price on a purchase but only the lease payments on a lease, which can materially favor leasing. Consult your state DMV or a tax professional for jurisdiction-specific figures.
Buy vs. lease terms defined
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