Finance Calculator
Lease vs Buy Calculator
Compare the true cost of leasing vs buying a car over the same ownership period — monthly payments, total spend, and what you get at the end.
Vehicle Details
🔑 Lease
Multiply by 2400 to get APR. (0.00125 = 3% APR)
Monthly Lease Payment
$389
🛒 Buy
Your car's value when the lease would end — what you'd own.
Monthly Loan Payment
$718
Buying saves you more
Net cost to buy is lower over the same period when you account for the car's residual value.
You save
$7,751
How lease payments are calculated.
Finance Charge = (Cap Cost + Residual) × Money Factor
Monthly Payment = Depreciation + Finance Charge + Tax
APR ≈ Money Factor × 2400
Residual = MSRP × Residual %
Frequently asked questions.
Is leasing or buying cheaper?
Leasing has lower monthly payments but you own nothing at the end. Buying costs more monthly (or requires a longer loan) but builds equity. Most financial advisors favor buying for long-term value, especially if you keep the car 5+ years.
What is money factor in a lease?
Money factor is the lease equivalent of an interest rate. Multiply by 2400 to convert to APR. A money factor of 0.00125 equals 3% APR. Dealers often inflate the money factor — always ask for it explicitly.
What happens if I go over the mileage limit?
Leases charge $0.10–$0.25 per mile over the limit. At 12,000 miles/year and $0.15/mile overage, driving 15,000 miles would cost $450 extra per year.
Can I buy the car at the end of a lease?
Yes — this is the "buyout" option. The price is typically the residual value (what the dealer expected the car to be worth). If the car is worth more than the residual, buying it out can be a great deal.
Who should lease instead of buy?
Leasing suits drivers who want a new car every 2–3 years, drive predictable low-to-average miles, value the lowest monthly payment and full warranty coverage, or can write off the payments as a business expense. If you keep cars a long time or drive high miles, buying is almost always cheaper over the long run.
What fees come with a lease?
Watch for the acquisition (or "bank") fee of $400–900 at signing, a disposition fee of $300–500 when you return the car, and any capitalized cost reduction (the lease version of a down payment). Excess-mileage and wear-and-tear charges can also hit at lease-end. Always ask for the money factor and residual in writing so you can compare deals honestly.