Auto Loan vs Lease Comparison Calculator
Buy vs. Lease Comparison
| MSRP | $35,000 |
| Term | 36 months |
| Buy Down Payment | $3,500 |
| Buy Sales Tax | $2,450 |
| Buy Loan Amount | $31,500 |
| Buy Monthly Payment | $971.19 |
| Buy Total Payments | $34,963 |
| Resale Value at End | $20,230 |
| Net Cost — Buy | $20,683 |
| Lease Upfront Fees | $3,695 |
| Lease Monthly Payment | $452.68 |
| Lease Total Payments | $16,296 |
| Mileage Overage | $0 |
| Disposition Fee | $400 |
| Total Cost — Lease | $20,391 |
| Savings with Lease | $291 |
Summary Statistics
What Is a Buy vs. Lease Comparison?
Deciding whether to buy or lease a car comes down to comparing the true cost of each path over the same time horizon, not just the monthly payment. Buying spreads the vehicle's purchase price across a loan while you keep the asset, so the calculation must account for the down payment, sales tax, total loan payments, and the resale value the car still has when the term ends. Leasing is effectively paying for the depreciation you use — the difference between the capitalized cost and the residual value — plus a finance charge, upfront fees, mileage overage, and a disposition fee at return. The two paths feel similar month to month, which is exactly why the total-cost comparison matters: a lease with a tempting payment can still be the more expensive choice once fees and mileage are counted, and a buy with a higher payment can come out ahead once you bank the car's remaining value. This calculator models both paths side by side over the same term so the comparison is apples to apples.
How the Comparison Works
On the buy side, the loan amount is the MSRP minus your down payment, and the monthly payment is computed with a standard amortization formula using your APR and term. The true cost of buying is the down payment plus sales tax plus every loan payment, minus the car's projected resale value at the end of the term — that residual equity is the reason buying can beat leasing despite higher monthly payments. On the lease side, the monthly payment is the financed depreciation plus a money-factor finance charge, with sales tax applied monthly. The money factor is the lease industry's way of expressing an interest rate: divide an APR by 2,400 to get the money factor, then multiply it by the sum of the capitalized cost and the residual value to get the monthly finance charge. The total lease cost adds the upfront down payment and acquisition fee, any mileage overage beyond your allowance (the miles you drive above the contract limit, billed per mile at return), and the disposition fee charged when you hand the car back. Whichever path has the lower total is the winner, and the difference is the net savings you would realize over the term.
Understanding Your Results
Buying typically wins over longer terms and when resale values hold up, because you capture the car's remaining equity; leasing wins when you want lower payments, drive under the mileage allowance, and plan to swap vehicles frequently. The biggest sensitivity in the model is the residual value percentage — a lease with an aggressive residual looks artificially cheap, while a weak one pushes the monthly payment up sharply. Check the mileage inputs too: exceeding the allowance by even 3,000 miles a year at 25 cents per mile adds $750 a year on top of the lease, and most contracts bill overage at rates that make the dealer a tidy profit. Two caveats are worth remembering when you read the result. The resale value used on the buy side is a projection, and real market conditions can shift it either way; and leasing always carries the risk of wear-and-tear charges at return. Use this comparison as a planning tool for your actual numbers, and remember that taxes, insurance, and maintenance are roughly comparable across both paths for the same vehicle.
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