Compare the true cost of leasing vs. buying a car over any term. Enter your vehicle price, down payment, loan or lease details, and sales tax rate to see a side-by-side breakdown of total lease cost vs. total purchase cost — so you can choose the option that fits your budget.
Cost Advantage
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Total Cost to Buy
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Total Cost to Lease
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Monthly Loan Payment
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Monthly Lease Payment
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Recommendation
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It depends on your driving habits, budget, and long-term goals. Leasing typically offers lower monthly payments and lets you drive a newer car every few years, but you build no equity. Buying costs more upfront and in monthly payments but you own the asset outright once paid off, which is better value over the long term if you keep the car.
Lease costs include a monthly payment (based on depreciation + finance charge), an upfront down payment or cap cost reduction, an acquisition fee, and sometimes a disposition fee at lease end. Total lease cost over a 36-month term on a $35,000 vehicle typically ranges from $12,000 to $18,000 depending on money factor and residual value.
The money factor is the lease equivalent of an interest rate. It is a small decimal number (e.g., 0.0025) that you can convert to an APR by multiplying by 2,400. A lower money factor means you pay less in finance charges over the lease term.
Residual value is the estimated worth of the vehicle at the end of the lease term, expressed as a percentage of MSRP. A higher residual value means lower monthly payments because you are only financing a smaller portion of the car's depreciation.
Not necessarily. Leasing can make financial sense if you prefer driving a new car every few years, want lower monthly payments, or use the vehicle for business purposes. However, you do not build equity and may face mileage penalties, making buying more cost-effective over the long run for most drivers.
At the end of a lease you can return the vehicle (and potentially pay a disposition fee), buy it at the pre-set residual price, or trade it in for a new lease. You may also owe charges for excess mileage or wear and tear.
A larger down payment on a purchase reduces your loan balance and total interest paid. For a lease, a larger cap cost reduction lowers monthly payments but does not reduce your total lease cost proportionally and is at risk if the car is totaled early in the lease. Keeping a lease down payment small is often advisable.
The break-even point is the number of years at which buying becomes cheaper than continually leasing the same class of vehicle. Our calculator compares total out-of-pocket costs over the same term — factoring in the car's residual value for buyers — to show you which option is cheaper for your specific scenario.