Lease vs Buy Calculator — Compare Total Cost of Ownership
Compare the true cost of leasing versus buying a car over time. Factor in depreciation maintenance insurance taxes and opportunity cost to make the right choice in 2026.
The lease versus buy decision is one of the biggest financial choices car shoppers face. Leasing offers lower monthly payments and a new car every 2-3 years while buying builds equity and eliminates payments once the loan is paid off. The right answer depends on how long you keep cars your annual mileage budget and whether you view a car as a financial asset or a lifestyle expense. Our calculator compares the total cost of both options over your planned ownership period.
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Key Information
| Parameter | Details |
|---|---|
| Average Lease Payment (2026) | $530/month (new car) |
| Average Loan Payment (2026) | $730/month (new car) |
| Typical Lease Term | 36 months |
| Mileage Allowance | 10000 - 15000 miles/year |
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Use Calculator NowFrequently Asked Questions
Is it cheaper to lease or buy a car?
Over the short term 2-3 years leasing is cheaper with lower monthly payments no down payment in some cases and no repair costs under warranty. Over the long term 5+ years buying is almost always cheaper because once the loan is paid off you have years of payment-free ownership. If you keep a car 8-10 years buying saves $10000-30000 compared to continuous leasing.
What are the hidden costs of leasing?
Leasing has several hidden costs including mileage overage charges typically $0.15-0.30 per mile above your allowance wear and tear charges at lease end disposition fees of $300-500 and the cost of gap insurance. You may also face early termination penalties equal to all remaining payments if you need to end the lease early. Always negotiate the money factor which is the leasing equivalent of interest rate.
When does leasing make financial sense?
Leasing makes sense if you drive under 12000 miles per year always want the latest safety and technology features use the car primarily for business and can deduct lease payments or know you will want a different car within 3 years. Luxury cars are often better to lease than buy because they depreciate heavily. However if you drive a lot or keep cars long-term buying is the clear winner.
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Last updated: 24 March 2026