Lease vs Buy Car Calculator
Whether leasing or buying a car costs less over the same months: lease payments, fees and excess-mileage charges against the down payment, loan payments and the value left at the end.
Result…
How it's calculated
Excess charge = max(0, distance driven − allowance) per year × years × charge per km or mile Lease cost = payment × months + due at signing + end fees + excess charge Buying cost = down payment + fees + loan payments made + loan balance left − value at the end + extra costs Difference = lease cost − buying cost (positive: buying is cheaper)
Compares the two ways of driving the same car for the same months. Leasing costs the monthly payments, what is due at signing, fees at the end and any charge for driving over the allowance. Buying costs the down payment and fees, the loan payments made in that time and the balance still owed, less what the car is worth when you would hand a lease car back. The cheaper option and the gap are shown, with the cost per month of each. The resale value and your yearly distance usually decide it, so try a few. For the lease payment itself use the car lease calculator; for the loan payment, the auto loan calculator.
Your numbers, step by step
About the Lease vs Buy Car calculator
This lease vs buy car calculator compares the two ways of driving the same car over the same months and shows which costs less, and by how much. On the lease side it counts the monthly payments, what is due at signing, fees at the end and the charge for driving beyond the yearly allowance. On the buying side it counts the down payment and fees, the loan payments made in that time and the balance still owed, less what the car is worth when the lease would end. It shows both totals, the cost per month of each, the excess-distance charge and the loan payment, in km or miles. The working is shown step by step. To work out a lease payment from the price and residual, use the car lease calculator; for the loan itself, the auto loan calculator.
How to use it
- Choose the “Units” and enter the “Months to compare (the lease term)”.
- Enter the “Lease payment per month”, the amount “Due at signing” and the “Fees at the end of the lease”.
- Enter the “Distance allowed per year”, the “Distance you drive per year” and the “Charge for each extra” km or mile.
- Enter the “Price to buy”, “Down payment”, “Other buying fees”, “Loan interest rate”, “Loan term” and the “Value of the car at the end”, then read which is cheaper.
Worked example
Over 36 months, a lease at 400 a month with 3,000 due at signing and a 400 end fee costs 18,800. Driving 18,000 km a year against a 15,000 km allowance adds 9,000 km × 0.15 = 1,350, for a total of 19,150. Buying the same car for 35,000 with 5,000 down and a 30,000 loan at 6% over 60 months means 36 payments of 579.98 (20,879.43) and 13,086.10 still owed. With the car worth 22,000 at the end, buying costs 5,000 + 20,879.43 + 13,086.10 − 22,000 = 16,965.53, so buying is cheaper by 2,184.47.
Updated
Questions people ask
How do I compare leasing and buying a car?
Add up everything a lease costs over its term, then everything buying costs over the same months less what the car is worth at the end. The smaller total is the cheaper way to drive that car for that time.
Is it cheaper to lease or buy a car?
It depends on the deal, how far you drive and how much the car keeps its value. Buying tends to win when the resale value holds up and you drive a lot; leasing can win when the car loses value fast or the lease has low fees.
How is the excess mileage charge on a lease worked out?
Take the distance you drive per year minus the allowance, multiply by the years of the lease, then by the charge for each extra km or mile in the contract. Driving 3,000 km over a year for 3 years at 0.15 each is 1,350.
Why does the resale value matter so much when buying?
Buying counts the car's value at the end as money you get back. A small change in that value moves the whole comparison, so try a lower figure to see whether buying still comes out ahead.
What does the lease vs buy comparison leave out?
What the down payment could have earned elsewhere, any option to buy the car at the end of the lease, and differences in insurance or repairs beyond the extra costs you enter. Lease rules and taxes differ by country and dealer, so read the contract and ask a financial adviser if you are unsure.