The lease vs buy car breakdown compares the true 5-year cost of leasing versus financing a vehicle purchase. Enter the vehicle details and lease terms to see total cost, equity built, and whether leasing makes financial sense for your situation.
Vehicle & Financing Details
Buy (Finance)
5-year total cost
Lease (Two Leases)
5-year total cost
How to Compare Lease vs Buy Car Costs
Comparing lease vs buy requires looking at the true total cost over a defined period (typically 5 years). Monthly payment comparison is misleading — leases always have lower monthly payments but build no equity.
The equity factor
After 5 years of financing a $35,000 car, you own a vehicle worth roughly $15,000-20,000. After leasing, you own nothing. This equity difference fundamentally changes the true cost comparison — buying's total cost must be reduced by the vehicle's remaining value.
Mileage is critical for leasing
If you drive significantly more than the lease allowance, overage charges add up quickly. At $0.25/mile over 15,000 miles on a 12,000-mile lease: 3,000 × $0.25 = $750/year, or $2,250 over a 3-year lease. High-mileage drivers almost always save money by buying.
When leasing makes financial sense
Leasing makes the most sense if: (1) you can write off the lease payment as a business expense, (2) you always want a new car under warranty, (3) you drive low miles and won't incur overage charges, (4) the specific lease has a heavily subsidized money factor making payments unusually low.
Frequently Asked Questions
Is this lease vs buy car calculator free?
Yes, completely free with no signup required.
Is leasing or buying a car cheaper overall?
Buying is almost always cheaper over the long run (5+ years) because you build equity and eventually own the car free and clear. Leasing is a perpetual payment — when the lease ends, you have nothing. However, leasing offers lower monthly payments, always having a new car under warranty, and flexibility to change vehicles every 3 years.
What happens if I go over the mileage limit on a lease?
Lease agreements typically allow 10,000-15,000 miles per year. Excess mileage fees are typically $0.15-0.30 per mile over the limit. If you drive 20,000 miles/year and have a 12,000-mile lease, you'd pay 8,000 × $0.25 = $2,000 in fees at lease end. High-mileage drivers should almost always buy.
Can I negotiate a lease?
Yes — the capitalized cost (equivalent to the sales price), the money factor (lease interest rate), and residual value are all potentially negotiable. Reducing the cap cost by $1,000 saves about $28/month on a 36-month lease. Getting a lower money factor also saves money. Research money factors on leasehackr.com before negotiating.
What is the residual value on a lease?
The residual value is what the leasing company predicts the car will be worth at lease end. Higher residual values mean lower monthly payments because you're 'using up' less of the car's value. Cars with high resale values (Toyota, Honda) often have better lease deals because of strong residuals.