Free lease vs buy calculator — compare total cost, monthly payments, and equity over time to decide whether leasing or buying is better for you.
The answer depends on your driving habits, how long you keep cars, whether you want equity, and your monthly budget.
Run the numbers before deciding. Many people assume leasing is always cheaper — but over 5+ years, buying almost always wins on total cost.
There is no universally right answer to lease vs buy — it depends entirely on your driving habits, financial goals, and how often you want a new vehicle.
Key Features & Benefits
- Total Cost Comparison — Compare total out-of-pocket cost over 3-7 years for leasing vs buying — including payments, maintenance, and residual value.
- Monthly Payment Breakdown — See lease payment vs loan payment side-by-side, including money factor, residual, cap cost, and amortization.
- Equity Analysis — Understand how much equity you build (or don't) with a lease vs purchase over time.
- Mileage Impact — Factor in your annual driving habits — excess mileage penalties can make leasing significantly more expensive.
Frequently Asked Questions
Is it better to lease or buy a car?
It depends on your priorities. Leasing offers lower monthly payments and a new car every 2-3 years, but you build no equity. Buying costs more monthly but you own the car at the end and have no mileage restrictions. If you drive over 12,000 miles/year or keep cars 5+ years, buying is usually cheaper.
What is a money factor in a lease?
The money factor is the lease equivalent of an interest rate. Multiply it by 2,400 to get the approximate APR. For example, a money factor of 0.0025 equals about 6% APR. Lower money factors mean less interest cost on your lease.
Can I negotiate a lease like a purchase?
Yes. You can negotiate the cap cost (vehicle price), money factor (interest rate), and sometimes the residual value. Lowering the cap cost is the most effective way to reduce your lease payment.
What happens at the end of a lease?
You have three options: return the vehicle and walk away, purchase it at the predetermined residual value, or trade it toward a new lease or purchase. If the vehicle is worth more than the residual value, buying and reselling can actually be profitable.
Are there hidden costs in leasing?
Watch for: excess mileage charges ($0.15-$0.30 per mile over the limit), disposition fees ($300-$500 at lease return), wear-and-tear charges for damage beyond normal use, and early termination penalties. Factor these potential costs into your lease-vs-buy analysis for a realistic comparison.