Car Lease vs Buy Calculator

Lease and buy, priced on cash out of pocket

On a $38,000 vehicle with $4,000 down and 6.9% APR financing over 36 months, buying costs $19,737.63 in net cash (down payment plus payments, minus the $22,000 expected residual value). Leasing the same term at $429/month with $3,500 due at signing costs $18,944.00 total. That makes leasing $793.63 cheaper on cash over the 36 months in this example.

The buy-side number nets out the residual value you'd still hold at the end -- the equity in the car, or what you'd get selling it -- which is the piece people forget when they compare a loan payment directly to a lease payment.

This comparison only covers the term you enter. If you plan to keep the car well past the loan payoff, buying's real advantage (owning an asset with no more payments) shows up in years the lease comparison doesn't cover.

What residual value assumptions do to this comparison

The $22,000 residual is an estimate of what the car is worth (or what you could sell it for) at the end of the term -- it isn't guaranteed, and a lower actual resale value shifts this comparison toward leasing being the better cash outcome.

Ignores tax credits and residual-risk surprises. Not auto-finance advice. Sales tax treatment, EV incentives, and lease-end wear-and-tear charges are not modeled and vary by state and manufacturer.

For the loan side specifically -- payment size and how much you'd still owe at various points in the term -- the Auto Loan Payment & Depreciation Calculator breaks that out on its own.

Where this fits with the rest of the purchase

If you're weighing a personal loan against dealer financing for the buy side, run both rates through the Personal Loan Payoff Calculator to see which one actually costs less over the term.

The same rent-vs-own logic applies to housing -- see the Rent vs. Buy Break-Even Calculator if you're running similar math on a home.

Frequently Asked Questions (FAQ)