Lease vs Buy Calculator

The decision depends on your financial situation and driving habits. Buying is typically better if you plan to keep the car long-term, drive more than 15,000 miles per year, or want to build equity. Leasing may be better if you prefer lower monthly payments, like driving newer cars with latest features, and stay within mileage limits.

Leasing costs include a down payment, monthly payments, sales tax, and potential end-of-lease fees. Monthly lease payments are typically lower than loan payments, but you'll have no ownership equity and may face charges for excess wear, tear, or mileage.

When you buy a car, you take out a loan and eventually own the vehicle outright. When you lease, you're essentially renting the car for a set period and must return it at the end of the lease term, though you may have the option to purchase it.

Leasing isn't necessarily a waste of money, but it depends on your priorities. While you don't build equity, leasing can provide lower monthly payments, warranty coverage, and the ability to drive newer vehicles. It makes sense for people who prefer driving late-model cars and don't exceed mileage limits.

Yes, you can negotiate several aspects of a lease, including the vehicle's selling price (capitalized cost), down payment, and sometimes the interest rate (money factor). The monthly payment is calculated based on these negotiated terms, so getting a better deal on the car's price will lower your lease payment.

If you exceed the mileage limit specified in your lease agreement, you'll typically pay a per-mile charge, usually ranging from $0.15 to $0.30 per mile. These charges can add up quickly, so it's important to estimate your annual driving accurately before signing a lease.

While a down payment can lower your monthly lease payments, many experts recommend minimal or no money down on a lease. If the car is stolen or totaled early in the lease, you may not recover your down payment, unlike with a purchase where you have equity in the vehicle.