A lease payment and a loan payment aren’t directly comparable — buying builds ownership that has value at the end, while a lease leaves nothing owned once the term is up. This calculator compares both on a net-cost basis.
How it works
Leasing’s cost is what’s due at signing plus every monthly payment, with nothing recovered at the end. Buying’s cost adds the down payment and loan payments, then subtracts what the car would be worth at that point minus whatever loan balance remains — the equity actually built by owning it.
Why loan payments aren’t a full cost the way lease payments are
Every mortgage-style loan payment includes principal, which isn’t lost — it becomes ownership stake, recovered in the value-minus-balance subtraction at the end. A lease payment has no equivalent recovery; every dollar is gone once paid.
How to use this calculator
- Enter the car price, financing terms, and expected depreciation.
- Enter the lease payment, amount due at signing, and years to compare.
Frequently asked questions
Why does leasing often look cheaper over a short comparison period?
Buying carries large upfront costs (the down payment) that are recovered slowly through equity — over just a few years, that equity hasn’t built up enough to offset them yet.
Does this account for mileage limits or wear-and-tear charges on a lease?
No — those are lease-specific costs that depend on the individual contract and how the car is used, not reflected in this comparison.
What if I plan to buy the car at lease-end?
That’s a different scenario — the buyout price at lease-end, not the depreciated market value, would be the number to compare against continuing to lease or buying outright now.
