Lease vs Buy Calculator — Which Is Cheaper for Your Car?
Enter the lease terms (due at signing, monthly payment, fees) and the buying terms (price, deposit, rate, and the car’s resale value at the end of the period). CalcWize totals the cost of each over the same number of months and tells you which is cheaper — and by how much.
When this is useful
When a dealer pushes a lease with an attractive monthly payment and you want the honest comparison. Leasing almost always looks cheaper month-to-month; the real question is the total cost over the same period, including what you would own at the end if you bought instead.
How the comparison works
The lease cost is everything you pay — due at signing, monthly payments, and fees. The buy cost is your deposit plus payments over the same period, plus any loan balance still owed, minus the car’s resale value (the asset you keep). Comparing those two totals is the fair fight.
Why resale value decides it
Buying usually wins over the long run because you own an asset at the end; leasing tends to win if you change cars often and value lower payments and no resale hassle. The resale assumption is the biggest lever in the whole comparison — a car that holds its value tilts the maths strongly toward buying.
The hidden lease costs
Leases cap your mileage and charge for going over; they bill for wear and tear when you hand the car back; and they often carry acquisition and disposition fees. Build those into the fees field so the comparison reflects what a lease really costs, not just the advertised payment.
Common mistakes
Comparing a 3-year lease payment to a 6-year loan payment — different terms are not comparable. Ignoring resale value when buying. And forgetting that at a lease’s end you own nothing and start the cycle over again.
Frequently asked questions
- Is leasing or buying cheaper?
- Over a single term, buying is usually cheaper in total because you end up owning an asset, while a lease leaves you with nothing. Leasing can win if you change cars often, want lower payments, and value avoiding resale hassle. The resale value you assume is what decides it.
- What resale percentage should I use?
- A typical car keeps roughly 50–60% of its value after three years, though it varies widely by make and model. If you’re unsure, 55% over three years is a reasonable starting point; cars known to hold value may do better.
- What does a lease leave out?
- Mileage limits and excess-mileage charges, wear-and-tear billing at return, and acquisition or disposition fees. Fold those into the fees field so the comparison is honest.
How we calculate it
Lease cost = amount due at signing + (monthly payment × term) + fees. Buy cost = down payment + (loan payment × term) + any loan balance still owed at the end of the term − the estimated resale value. The two totals are compared over the same number of months.
What it doesn't do
- Detailed loan amortisation (use the Auto Loan calculator)
- Business-lease tax treatment and write-offs
- Mileage-overage penalties (estimate them and add to fees)
Last reviewed: 2026-05