Compare leasing a car against buying it and reselling later — total cost of each, side by side, with the verdict.
What Is a Lease vs Buy Comparison?
A lease vs buy calculator compares the two ways to drive a car for a fixed period: lease total = $400 × 36 = $14,400; buying net = $25,000 − $12,000 resale = $13,000 — buying is cheaper by $1,400. Leasing buys flexibility (new car every few years, warranty cover); buying builds equity but carries depreciation risk. The verdict is pure cost — lifestyle preferences decide close calls.
How to Use
- Enter the lease monthly payment, months and upfront fees.
- Enter the purchase price and expected resale value after the same period.
- Click “Compare”.
Formula
Lease total = monthly × months + fees. Buy net = price − resale. Verdict = cheaper option.
Worked Example
Lease $400 × 36 = $14,400.00. Buy $25,000 − $12,000 = $13,000.00. Verdict: buying is cheaper by $1,400.00.
How It Works, In Plain Words
The tool prices both ways of driving the same car for the same stretch of time, then compares. On the lease side, monthly payment × months gives $400 × 36 = $14,400, plus upfront fees — left at 0 in the example, but the field exists because real leases charge them, and the hidden-costs FAQ tells you to include mileage overage, excess wear and early-termination fees there too. On the buy side, the cost is not the $25,000 sticker: it is price minus resale, $25,000 − $12,000 = $13,000, because the buyer still owns an asset worth $12,000 at the end.
That subtraction is the whole insight: the buyer’s true cost over the period is depreciation — the $13,000 lost between price and resale, which the depreciation FAQ calls the buyer’s biggest cost. The verdict is then a plain comparison: $13,000 against $14,400, so buying is cheaper by $1,400.00. What the tool deliberately leaves out is everything the introduction admits decides close calls — flexibility, warranty cover, equity — because those are preferences, not arithmetic. Run it with your own resale estimate before trusting the verdict: the resale figure is the one input nobody can know in advance.
Real-World Uses
A driver quoted $400 a month over 36 months runs the lease side first — $14,400 with fees at 0 — then adds the dealer’s actual upfront charges into the fees field to see the honest total. A buyer comparing the same car at $25,000 enters a $12,000 resale estimate and learns the real cost of the period is $13,000, not the sticker price that made buying look hopeless. A high-mileage driver works through the mistakes list before signing anything: mileage penalties and wear charges belong in the fees field, and once they are in, the verdict sometimes flips.
Benefits
- Both options costed side by side
- Upfront fees included on the lease side
- Clear verdict line
- Currency-neutral
Features of Our Tool
- Instant results in your browser
- No sign-up, no download, 100% free
- Works on mobile, tablet and desktop
- Clear step-by-step explanation below the tool
- Private — your entries never leave your device
Common Mistakes
- Ignoring the resale value — buying looks worse without it
- Forgetting lease mileage penalties and wear charges
- Comparing different periods (match the months)
Common Mistakes to Avoid
The mistakes list names the three classics: ignoring the resale value, forgetting mileage penalties and wear charges, and comparing different periods. In prose, two more. Do not leave the upfront fees at 0 out of laziness: the worked example uses 0, but the hidden-costs FAQ puts upfront fees first among the extras, and a lease that looks cheaper can stop looking cheaper the moment they are entered. And do not treat the resale estimate as a fact: the when-leasing-wins FAQ names uncertain resale as a reason leasing wins, so test a lower resale figure and watch whether the verdict survives it.
FAQ
Is leasing or buying cheaper?
Depends on the numbers — here buying wins by $1,400.00.
What is the main advantage of leasing?
Lower monthly cost, a new car every few years, and warranty cover — at the price of never building equity.
What is depreciation’s role?
It is the buyer’s biggest cost — the $13,000 lost between price and resale here.
Are there hidden lease costs?
Upfront fees, mileage overage, excess wear, and early-termination fees — include them in the fees field.
When does leasing win?
When depreciation is steep, resale is uncertain, or you value a new car and warranty every 2–3 years.
Does the tool include loan interest if I finance the purchase?
No. The buy side is price minus resale only — there is no interest, tax or insurance field — so a financed purchase costs more in reality than the net figure shown. Treat the $13,000.00 in the example as the depreciation cost of owning, and remember the verdict compares that against the lease total of $14,400.00, not against a full loan schedule.
What if both totals come out equal?
The tool says so plainly: both options cost the same. At that point the introduction’s advice takes over — the verdict is pure cost, and lifestyle preferences decide close calls: a new car every few years and warranty cover on one side, equity on the other.