About This Tool
Key Features
- Head-to-head comparison of total out-of-pocket costs for leasing versus purchasing over the same time period.
- Automatic depreciation modeling estimates your vehicle resale value to calculate true net cost of buying.
- Clear recommendation output tells you whether leasing or buying saves more money in your specific scenario.
- Detailed comparison table showing monthly payment, total cost, equity retained, and net cost for both options.
- Adjustable inputs for loan rate, loan term, lease term, and down payments on both options.
Frequently Asked Questions
When does leasing make more financial sense than buying?
Leasing can make sense when you want lower monthly payments, prefer driving a new car every 2-3 years, drive fewer than 12,000 miles annually, and want to avoid the hassle of selling a used vehicle. It is also beneficial for business owners who can deduct lease payments as a business expense. However, if you plan to keep the vehicle long-term, buying is almost always cheaper.
What happens if I exceed the mileage limit on my lease?
Most leases charge between $0.15 and $0.30 per mile over the agreed-upon limit. On a 36-month lease with a 12,000 mile annual allowance, going just 5,000 miles over could cost you $750 to $1,500 at lease return. Always estimate your annual driving accurately and negotiate a higher mileage allowance upfront if needed, as it is cheaper than paying overage fees.
Does this calculator account for maintenance and insurance differences?
This calculator focuses on the core financial comparison of purchase costs versus lease costs. Leased vehicles are typically under warranty for the entire lease term, which can reduce maintenance expenses. However, leased vehicles often require higher insurance coverage levels. For a complete ownership cost picture, combine this tool with our Car Insurance Estimator.