Car Lease vs Buy Calculator - Total Cost Comparison | Financial Calculator
Free car lease vs buy calculator. Compare total cost of buying vs leasing a car including loan payments, insurance, maintenance, and residual value. Make the smarter choice.
A symmetric total-cost comparison
Buying costs the down payment plus every loan payment plus insurance and maintenance over the horizon, minus the residual value you keep. Leasing costs the upfront payment plus all monthly lease payments plus its own insurance and maintenance over the same horizon. Both sides accrue carry costs for the full comparison period — after a shorter lease ends you would still be paying to drive something — which keeps the verdict honest.
Worked example with hypothetical terms
A $35,000 car: buy with $5,000 down and a 6%, 36-month loan ($912.66 per month) and sell at a $21,000 residual after three years, with $1,200 yearly insurance and $600 maintenance — total $22,255.69. Or lease at $450 per month with $2,000 down for 36 months, $1,200 insurance and $400 maintenance — total $23,000.00. Buying ends $744.31 cheaper here, but a weaker residual would flip it. Informational only.
How to Use
- Car Price — Enter the full purchase price of the car you are weighing up
- Buy Details — Enter the down payment, loan rate and term, yearly insurance and maintenance, plus the expected residual value when you would sell
- Lease Details — Enter the monthly lease payment, any upfront lease payment, the lease term, and yearly insurance and maintenance under the lease
- Match the Horizons — Note the comparison runs over the longer of the two terms, with carry costs accruing on both sides for that whole period
- Calculate — Click Calculate to see the total cost of each path and which one comes out cheaper
- Read the Breakdown — Inspect the line items — loan interest, carry costs, residual credit — to see what drives the verdict
FAQ
What costs are included in the buy total?
The buy total includes your down payment, all loan payments (principal + interest), annual insurance and maintenance multiplied by the comparison period, minus the estimated residual (resale) value of the car.
What costs are included in the lease total?
The lease total includes any upfront lease down payment, all monthly lease payments over the lease term, and annual insurance and maintenance multiplied by the comparison period.
Why does buying sometimes cost less than leasing?
After the loan is paid off, a bought car has no further payments and retains residual value. Leasing means perpetual payments with no asset at the end. Over a longer horizon, buying is often cheaper — but leasing offers lower monthly costs and flexibility.
What time horizon does the comparison use?
The longer of the loan term and the lease term. Insurance and maintenance accrue on both sides across that entire horizon, so a 60-month loan compared with a 36-month lease doesn't unfairly load five years of carry costs onto only one option.
How is the financed portion computed?
By standard amortization on price minus down payment. Financing $30,000 at a hypothetical 6% over 36 months costs $912.66 per month, or $32,855.69 in total payments — the interest is the difference above the $30,000 borrowed.
Why does residual value matter so much?
It is subtracted one-for-one from the cost of buying, because the car remains your asset. A model that holds its value can make buying cheaper even when its monthly loan payment is far above the lease payment; leasing always hands the car back with nothing kept.