Quick answer
The calculator compares the net cost of buying (down payment plus loan payments minus resale value) with leasing (due at signing plus payments) over the lease term. In the example, buying costs $7,271.39 net and leasing $17,944, so buying is $10,672.61 cheaper.
Enter the purchase price, down payment, loan rate and term, lease payment and term, and the expected resale value. The calculator returns both net costs. Use this lease vs buy calculator to check your own figures.
Related tools: Car Depreciation Calculator: Estimated value after years of declining-balance depreciation at a rate you enter.
How to use the Lease vs Buy Calculator
- Enter purchase price ($) (above 0).
- Enter down payment (buying) ($) (0 or more).
- Enter loan rate (APR) (%) (between 0 and 100).
- Enter loan term (months) (a whole number, between 1 and 120).
- Enter monthly lease payment ($) (above 0).
- Enter lease term (months) (a whole number, between 1 and 120).
- Enter due at lease signing ($) (0 or more).
- Enter estimated resale value at lease end ($) (0 or more).
- Press Calculate to see the result, and use Reset to start again.
| Input | What to enter | Allowed values |
|---|---|---|
| Purchase price | A number, in $ | > 0 |
| Down payment (buying) | A number, in $ | ≥ 0 |
| Loan rate (APR) | A number, in % | ≥ 0, ≤ 100 |
| Loan term | A whole number, in months | ≥ 1, ≤ 120 |
| Monthly lease payment | A number, in $ | > 0 |
| Lease term | A whole number, in months | ≥ 1, ≤ 120 |
| Due at lease signing | A number, in $ | ≥ 0 |
| Estimated resale value at lease end | A number, in $ | ≥ 0 |
Formula and method
Formula
buy cost = down + loan payments − resale value; lease cost = due at signing + lease payments
IEEE-754 double precision; shown to the decimals indicated.
Compares both over the lease term; taxes, fees, insurance, mileage charges and the time value of money are not included.
Worked examples
This example is verified: each one is an automated test case that the live calculator must reproduce exactly.
Example 1
Inputs: Purchase price = 35000; Down payment (buying) = 3000; Loan rate (APR) = 6; Loan term = 60; Monthly lease payment = 429; Lease term = 36; Due at lease signing = 2500; Estimated resale value at lease end = 18000.
| Result | Value |
|---|---|
| Cheaper over the lease term | Buying costs less |
| Net cost of buying | $7,271.39 |
| Total cost of leasing | $17,944.00 |
| Difference | $10,672.61 |
The first line is the headline result (cheaper over the lease term). Below it the lease vs Buy Calculator lists net cost of buying, total cost of leasing and difference, which describe the same case from other angles. IEEE-754 double precision; shown to the decimals indicated.
What is compared
Buying: down payment plus loan payments made during the lease period, minus what the car will be worth at the end. Leasing: money due at signing plus all lease payments. After a lease you own nothing, so the resale value is the key difference.
Where the answer depends on you
The resale value is your estimate, and a different estimate can reverse the result. The comparison also ignores insurance differences, mileage limits and excess-wear fees on leases, taxes and fees. Leasing can still suit people who want a new car every few years and low upfront payments.
How the result changes with purchase price
Holding every other input at the first worked example, this table changes only purchase price. It shows how sensitive the answer is to that one value; each row was produced by running this calculator.
| Purchase price | Cheaper over the lease term | Net cost of buying | Total cost of leasing |
|---|---|---|---|
| 17500 | Buying costs less | -$4,908.28 | $17,944.00 |
| 35000 | Buying costs less | $7,271.39 | $17,944.00 |
| 70000 | Lease costs less | $31,630.72 | $17,944.00 |
| 140000 | Lease costs less | $80,349.38 | $17,944.00 |
What happens with invalid input
These messages are produced by the calculator itself, so you know what to fix.
- Purchase price: entering "0" shows "Purchase price must be greater than 0." beside that field and no result.
- Monthly lease payment: entering "0" shows "Monthly lease payment must be greater than 0." beside that field and no result.
Choosing between the Lease vs Buy Calculator and similar calculators
Each row shows what a related calculator on this site asks for and what it returns, so you can pick the one that matches your question.
| Calculator | You enter | It returns |
|---|---|---|
| [Car Depreciation Calculator](/automotive/car-depreciation-calculator/) | purchase price, yearly depreciation and years | Estimated value |
| [Vehicle Payload Calculator](/automotive/vehicle-payload-calculator/) | gross vehicle weight rating and curb weight | Payload |
| [Rent vs Buy Calculator](/real-estate/rent-vs-buy-calculator/) | monthly rent, yearly rent increase and home price | Cheaper over the horizon |
| [D&D Point Buy Calculator](/other/point-buy/) | sTR score, dEX score and cON score | Points spent |
| [Lease Payment Calculator](/finance/lease-payment-calculator/) | capitalized cost, residual value and rate | Monthly lease payment |
Background: vehicle sizing and speed
A taller tyre travels farther per revolution, so the speedometer reads low and the effective gear ratio becomes numerically lower; a shorter tyre does the opposite. True speed is roughly the speedometer reading times the new tyre diameter divided by the old one. Verify with GPS over a known distance before changing parts.
Assumptions and limitations
- Resale value is your estimate
If a required value is empty, not a number, or outside its allowed range, the form marks that field with a message and shows no result instead of a misleading number. The automated checks deliberately try invalid entries for purchase price and monthly lease payment to confirm this.
Frequently asked questions
Is leasing ever cheaper?
Yes, when the resale value is low or the lease payment is small relative to the car's price.
Does it include interest on the down payment?
No; opportunity cost is not modelled.
What about mileage limits?
Not included; check the lease contract.
What does the Lease vs Buy Calculator calculate?
Compare the cost of leasing with buying over the lease term. It returns Cheaper over the lease term, Net cost of buying, Total cost of leasing and Difference.
What formula does the Lease vs Buy Calculator use?
buy cost = down + loan payments − resale value; lease cost = due at signing + lease payments. Compares both over the lease term; taxes, fees, insurance, mileage charges and the time value of money are not included.
What do I need to enter in the lease vs Buy Calculator?
You enter Purchase price ($), Down payment (buying) ($), Loan rate (APR) (%), Loan term (months), Monthly lease payment ($), Lease term (months), Due at lease signing ($) and Estimated resale value at lease end ($).
How is the result rounded or limited?
IEEE-754 double precision; shown to the decimals indicated. Resale value is your estimate.
What is an example of a lease vs Buy result?
With purchase price 35000, down payment (buying) 3000, loan rate (APR) 6, loan term 60 and monthly lease payment 429, the cheaper over the lease term is Buying costs less.
Related calculators
- Car Depreciation Calculator — Estimated value after years of declining-balance depreciation at a rate you enter.
- Tire Size Calculator — Overall diameter, sidewall height and revolutions per mile from a tire size such as 225/45R17.
Sources
- Common definition used on this page. No single authoritative standard defines it, so the exact formula is stated in the formula section above
Content last reviewed 2026-11-04. Formulas and worked examples are checked by automated tests against independently computed values.