What this calculator actually compares
Most lease-vs-buy arguments compare the wrong number: the monthly payment. A lease payment is almost always lower than a loan payment on the same car — that's how leases are built, not evidence that leasing is cheaper. The honest comparison is total cost over the same stretch of time, counting what you get back at the end.
This calculator runs both options over your lease term and totals every dollar out and in:
- Lease: your down payment (cap cost reduction) plus every monthly payment, computed the standard way — a depreciation fee, a finance fee based on the money factor, and sales tax.
- Buy: your down payment plus loan payments over the same months, plus whatever you'd still owe on the loan at that point, minus what the car is worth then — because unlike the lease, you walk away owning something.
Optionally, it adds one more honest line: the return the extra upfront cash in one option could have earned if you'd invested it instead.
Every input comes from you — your quote's money factor and residual, your loan APR, your tax rate. The calculator invents nothing. For the formulas themselves, in plain English, see how the math works.
What it deliberately leaves out
Fees (acquisition, disposition, registration), insurance differences, maintenance, mileage overage and wear-and-tear charges, and lease-end purchase options. These vary too much to guess responsibly — add the ones from your own quotes to whichever side they belong to. Details on each are in the reference page.
Frequently asked questions
Where do I find my money factor?
On the lease worksheet, or by asking the dealer directly — they must disclose it. It looks like a small decimal, such as 0.00125. If you're quoted an interest rate instead, divide it by 2,400 to convert (6% → 0.0025).
Why does the buy side get credit for resale value?
Because at the end of the comparison window the buyer owns a car and the lessee doesn't. Counting the loan payments without counting the car would make buying look far worse than it is. The trade-off: that credit depends on your resale estimate, which is a guess — try a pessimistic one and see if the verdict flips.
Is the lower monthly payment ever the right reason to lease?
Cash flow is real — if the lease payment is what fits your budget, that matters. But this calculator's job is to show what that lower payment costs you in total, so you can make that trade with your eyes open.
How is sales tax handled?
The lease side taxes each monthly payment (how most US states do it); the buy side taxes the full price and rolls it into the loan. A few states tax leases differently — check yours, and see the tax notes.