Lease vs Buy Car Calculator — Which Option Costs Less?
Compare total cost of leasing versus buying a car over 3-5 years. Factor in monthly payments depreciation insurance maintenance and opportunity cost.
The lease vs buy decision depends on your driving habits financial situation and preferences. Leasing offers lower monthly payments and a new car every 2-3 years but you never build equity. Buying has higher upfront costs but you own the asset. Over a 5-year period buying is typically cheaper overall but leasing preserves cash flow. Our calculator shows the true total cost of each option to help you decide.
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Key Information
| Parameter | Details |
|---|---|
| Average Lease Payment | $350 - $550/month |
| Average Car Loan Payment | $500 - $750/month |
| Average New Car Depreciation | 15-20% in year 1 |
| Typical Lease Term | 36 months with 12000 miles/year |
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Use Calculator NowFrequently Asked Questions
Is it smarter to lease or buy a car?
Over 5 years buying is almost always cheaper by $5000-$15000 total. However leasing wins if: you want a new car every 2-3 years you drive under 12000 miles/year you prioritize lower monthly payments or you use it as a business deduction. If you plan to keep a car for 5+ years buying and holding it after the loan is paid off saves the most money.
What are hidden costs of leasing?
Lease-end fees can be surprising: excess mileage charges ($0.15-$0.30/mile over limit) wear-and-tear charges for dents scratches or tire wear disposition fee ($300-$500) and early termination penalties. If you drive 15000 miles/year instead of the 12000 limit that is $1350-$2700 in overage charges over a 3-year lease. Always negotiate higher mileage limits upfront.
Can I negotiate a car lease?
Yes lease terms are negotiable. Focus on negotiating the capitalized cost (selling price) money factor (interest rate equivalent) and residual value. A lower cap cost directly reduces your monthly payment. Some dealers inflate the money factor by 2-3x the buy rate so ask for the base money factor. Also negotiate zero or reduced acquisition and disposition fees.
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Last updated: 24 March 2026