Why the monthly payment lies
Lease payments are almost always lower than loan payments on the same car, which makes leasing look cheaper. But that comparison is rigged: a lease payment buys you nothing but temporary use, while a loan payment builds equity in an asset you keep. To compare fairly you have to look at net cost over the whole period you'll keep the car — and credit buying with the resale value you walk away with. That's exactly what this calculator does.
How the comparison works
For buying, it adds up your down payment plus every loan payment you make during the years you keep the car, adds any loan balance still owed at the end, then subtracts the car's resale value (which is yours to sell or keep driving). For leasing, it adds every lease payment over the same period plus upfront fees — and credits you nothing at the end, because you hand the car back. The lower net cost wins.
The decisive factor: how long you keep it
Time is what flips the answer. Leases are structured to cover a car's steepest depreciation years, so over a single 3-year lease term the gap can be small. But buyers win big when they keep the car well beyond the loan payoff — those are years of payment-free driving while the leaser is still making payments forever. Set the "years you'll keep the car" high and buying usually pulls ahead; set it to a short churn cycle and leasing narrows or wins.
When leasing can still make sense
- You want a new car every 2–3 years and value that over cost — leasing removes resale hassle.
- Business use where lease payments may be deductible (check with a tax professional).
- You drive low mileage and stay within lease limits, avoiding per-mile penalties.
When buying almost always wins
- You keep cars a long time. The longer you drive a paid-off car, the more buying dominates.
- You drive a lot. Leases charge steep per-mile fees over the limit; ownership doesn't care.
- You want to build wealth. A paid-off car is an asset and frees up cash flow — money that can compound instead of vanishing into perpetual payments.
Whatever the result here, remember the biggest lever isn't lease-vs-buy at all — it's how much car you buy in the first place. Pair this with our lease payment and how much to spend on a car guides.