Transportation calculator

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.

InputsLive
Vehicle price
$
Term
mo
Buy
Down payment
$
Loan APR
%
Resale value
$
Lease
Cap cost
$
Residual value
$
Money factor
Result
Buying is cheaper
$597
Buy: $18,595 · Lease: $19,192 over 36 mo
Buy total cost$18,595
Lease total cost$19,192
Better optionbuy
Savings$597

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 it's calculated

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.

Buy total cost = Down payment + (Monthly payment × Loan term) Resale value
Lease total cost = Drive-off costs + (Monthly payment × Lease term) + Disposition fee
Savings = |Buy total Lease total|

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® methodology
Example

Worked example: $35,000 sedan over 36 months

Example: $35,000 sedan, 36-month term

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.

Buy total = $3,500 + ($619 × 36) $19,250
= $3,500 + $22,284 $19,250
= $6,534
Lease total = $1,500 + ($399 × 36) + $395
= $1,500 + $14,364 + $395
= $16,259
$9,725
Buying saves approximately $9,725 over three years versus leasing — assuming the vehicle is sold at 55% residual value.
Quick reference

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 ComponentBuyLease
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.

Practical tips

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 & limits

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.

Glossary

Buy vs. lease terms defined

The negotiated selling price of the vehicle used as the basis for a lease — equivalent to the purchase price in a buy scenario. Lower cap cost = lower monthly lease payment.
The lease equivalent of an interest rate, expressed as a decimal (e.g., 0.0025). Multiply by 2,400 to convert to an approximate APR. A MF of 0.0025 equals about 6% APR.
The manufacturer-set value of the vehicle at lease end, expressed as a percentage of MSRP. A higher residual means lower monthly payments but a higher buyout price at lease end.
All upfront costs due at lease signing: first month's payment, acquisition fee, security deposit, taxes, and registration. Comparable to a down payment on a purchase.
A charge (typically $300–$500) due at the end of a lease if you do not purchase the vehicle or start a new lease with the same brand.
Guaranteed Asset Protection insurance covers the difference between what you owe on a lease or loan and what your auto insurer pays if the vehicle is totaled or stolen.
The expected market value of a purchased vehicle at the end of your ownership period. Recovering a high resale value is the primary financial advantage of buying over leasing.
About

About this buy vs. lease calculator

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Questions

Frequently asked questions about the free buy vs lease calculator

A buy vs lease calculator is a free online tool that helps you compare total cost of buying (with loan + resale) against leasing for the same period. Buy total = down + total payments − resale. Lease total = down + total lease payments. Whichever is lower wins. It runs entirely in your browser with instant results and no sign-up.
The base payment uses principal + APR. Sales tax can be added via the input. Doc fees, registration, and destination charges aren't included — add them to the principal.
Your new lender pays off the old loan and issues a new one in its place. The savings come from a lower rate or longer term. A longer term lowers monthly but raises total interest.
No — these are estimates for planning. Actual loan terms depend on credit score, lender, and current rates. Always read the disclosure (TILA box) before signing.

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