Lease vs Buy Car Calculator

How this is calculated

⚠️ COMPARING MONTHLY PAYMENTS IS THE MISTAKE. A lease payment is almost always lower, because you are paying for the depreciation over a few years rather than for the car. The comparison only means anything over the SAME period with the END POSITION counted - and at the end of a lease you own nothing, while at the end of the equivalent period of a loan you own a car with a loan against it. SO THE HONEST COMPARISON IS: lease costs = deposit + payments + end fees. Buying costs = deposit + payments over the same months - the EQUITY you hold at that point, which is the resale value minus what is left on the loan. This tool does exactly that, and the two usually land much closer together than the monthly figures suggest. ⚠️ THE ANSWER HINGES ALMOST ENTIRELY ON THE RESALE VALUE, WHICH IS THE ONE THING NOBODY KNOWS. Every other input is contractual and certain. Resale is a guess about a market several years away, and moving it by a few thousand flips the result. That is the honest headline: this is not a calculation with an answer so much as a way of seeing how much your answer depends on one assumption. Run it with a pessimistic resale figure as well as a realistic one - if buying only wins on the optimistic number, it does not really win. MILEAGE LIMITS AND WEAR CHARGES ARE NOT MODELLED and they are where leases surprise people. Exceeding the allowance is charged per mile at the end, and 'excess wear' is assessed by the leasing company rather than by you. If you drive more than the allowance, add your own estimate of that cost to the lease side before comparing. RUNNING COSTS ARE LEFT OUT ON BOTH SIDES DELIBERATELY - insurance, tax, fuel and servicing are broadly similar either way and including them would inflate both totals while leaving the difference unchanged. Two exceptions worth knowing: a leased car is usually under warranty for the whole term, so unexpected repair bills fall on the buying side, and lease insurance requirements are sometimes stricter. THE PERIOD IS THE LEASE LENGTH. If you would realistically keep a bought car far longer than the lease, buying looks better than this shows - the strongest financial case for buying is keeping the car well past the loan, when payments stop and the asset keeps working. This tool cannot see that decision, and it is usually the decisive one. GENERAL INFORMATION, NOT FINANCIAL ADVICE. Terms, tax treatment and what you qualify for vary. For a large commitment, talk to a qualified adviser.

Common questions

Why not just compare the monthly payments?

Because they are not comparable. A lease payment is almost always lower, since you are paying for a few years of depreciation rather than for the car — so comparing them tells you which option takes less cash each month, not which is cheaper. The comparison only means something over the same period with the END POSITION counted: at the end of a lease you own nothing, while at the end of the same span on a loan you own a car with a loan against it. That equity is what leasing gives up, and it is the entire difference.

How is the buying side worked out?

Deposit, plus the loan payments made over the LEASE period, minus the equity you would hold at that point. Equity is the resale value minus the balance still outstanding, which the tool calculates from the loan terms rather than asking you to. That treats the money tied up in the car as recoverable, which it is — you can sell it. On the defaults, a $35,000 car bought with $5,000 down at 6.5% over 60 months leaves you roughly $6,800 of equity at 36 months, and that is what makes the two options close.

Which one usually wins?

Much more closely than the monthly figures suggest, and on typical numbers the difference is small enough that it should not be the deciding factor. That is genuinely the useful finding — people expect one option to be obviously better and it usually is not, over a single lease period. Where buying pulls clearly ahead is when you keep the car well past the loan, and that is a decision this tool cannot see. If you reliably drive cars for a decade, buying wins by a distance that no lease comparison captures.

What is the biggest uncertainty?

The resale value, by a long way, and it is worth being blunt about it. Every other input here is contractual and knowable — payments, rates, terms, fees. Resale is a guess about a used-car market several years away, and moving it by a few thousand flips the result. So this is less a calculation with an answer than a way of seeing how much your answer depends on one assumption. Run it with a pessimistic resale figure as well as a realistic one: if buying only wins on the optimistic number, it does not really win.

What about mileage limits?

Not modelled, and they are where leases most often surprise people. Exceeding the allowance is charged per mile at the end, and 'excess wear' is assessed by the leasing company rather than by you — which introduces a cost you cannot fully predict when you sign. If you drive more than the allowance, work out the likely charge and add it to the lease side before comparing. For high-mileage drivers this alone can decide the question, and it is the input the tool most obviously cannot supply for you.

Are running costs included?

No, deliberately, on both sides — insurance, tax, fuel and servicing are broadly similar either way, and including them would inflate both totals while leaving the difference unchanged. Two exceptions are worth knowing. A leased car is usually under warranty for the whole term, so unexpected repair bills land on the buying side rather than being shared. And lease agreements sometimes require higher insurance cover than you would otherwise choose. Both push slightly in favour of leasing and neither appears in the arithmetic.

What does this miss entirely?

The thing that most often decides it: how long you would actually keep a bought car. The comparison runs over the lease period because that is the only span where both options exist, but the strongest financial case for buying is keeping the car well past the loan — payments stop and the asset keeps working. Someone who leases repeatedly always has a payment; someone who buys and keeps has years without one. That is not visible here, and if it describes you, it matters more than anything the tool reports.

Take it further with AI

Copy this into ChatGPT or Claude with your own numbers filled in. It hands over the figures this calculator worked out, so the answer is built on real arithmetic instead of a guess.

I used the Lease vs Buy Car Calculator at https://www.bfcbrilliance.com/tools/lease-vs-buy-car-calculator.

What I entered:
- Lease - monthly payment ($): ___
- Lease - amount down ($): ___
- Lease length (months): ___
- Lease - fees at the end ($): ___
- Buy - price of the car ($): ___
- Buy - amount down ($): ___
- Buy - loan rate (%): ___
- Buy - loan term (months): ___
- Buy - what it is worth at the end of the period ($): ___

What it calculated:
- Buying costs this much more than leasing: ___
- Lease - total cost over the period: ___
- Buy - net cost over the same period: ___
- Buy - monthly payment: ___
- How much higher the loan payment is: ___

Use those figures as given — they are already worked out, so please don't recalculate or estimate your own. Help me turn them into a plan: what to buy or do, in what order, roughly what it should cost, and the mistakes people most often make with this job.

Keep this general and do not give financial advice — flag where I should talk to a qualified adviser.

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