Auto Lease vs. Buy Calculator
Deciding whether to lease or buy a car is a significant financial decision. This calculator helps you compare the total estimated costs of both options over a specific period, typically the lease term, allowing you to make an informed choice based on your financial situation and driving habits.
Lease Details
Buy Details
Comparison Results (over Lease Term)
Enter details and click 'Calculate Comparison' to see results.
Understanding Auto Lease vs. Buy
The decision to lease or buy a car is a common dilemma for many consumers. Both options have distinct financial implications, benefits, and drawbacks. This calculator aims to provide a clear financial comparison over a consistent period, typically the length of a lease, to help you understand the total costs involved.
What is Leasing?
Leasing a car is essentially a long-term rental agreement. You pay to use the vehicle for a set period (e.g., 24, 36, or 48 months) and a specified mileage limit. At the end of the lease, you return the car to the dealership, or you may have the option to purchase it for its residual value.
Pros of Leasing:
- Lower monthly payments compared to buying a new car.
- You always drive a new car, often with the latest features and under warranty.
- Less hassle with selling or trading in the car at the end of the term.
- Lower upfront costs (though a down payment is often still required).
Cons of Leasing:
- You don't own the car and build no equity.
- Mileage restrictions can lead to significant penalties if exceeded.
- Excessive wear and tear charges at lease end.
- Continuous car payments if you always lease.
- Insurance requirements can be higher.
What is Buying?
Buying a car means you take ownership of the vehicle, either by paying cash upfront or, more commonly, by financing it with a car loan. Once the loan is paid off, you own the car free and clear.
Pros of Buying:
- You own the asset and build equity.
- No mileage restrictions or wear and tear penalties.
- Freedom to customize the vehicle.
- Eventually, you'll have no car payments.
- You can sell or trade in the car whenever you want.
Cons of Buying:
- Higher monthly payments compared to leasing.
- Responsible for all maintenance and repairs once the warranty expires.
- Depreciation means the car loses value over time.
- Higher upfront costs (down payment, sales tax, fees).
- Hassle of selling or trading in the car.
How to Use the Calculator
To get the most accurate comparison, gather the following information:
- Vehicle MSRP: The manufacturer's suggested retail price for the car you're considering.
- Lease Details: Your proposed lease term, down payment, residual value percentage, money factor, acquisition and disposition fees, annual mileage allowance, and any estimated excess mileage.
- Buy Details: Your proposed loan term, down payment, loan APR, sales tax rate, any trade-in value, and your best estimate for the car's resale value at the end of the comparison period (which is the lease term). Also, estimate annual maintenance and insurance costs.
Input these values into the respective fields. The calculator will then compute the total estimated cost for both leasing and buying over the specified lease term, providing a direct financial comparison.
Interpreting the Results
The calculator will display the total estimated cost for both the lease and buy scenarios over the same comparison period. A lower total cost generally indicates the more financially advantageous option for that specific period. However, remember that financial cost is just one factor. Your lifestyle, driving habits, desire for a new car every few years, and long-term financial goals should also play a role in your final decision.
For example, if you drive many miles annually, buying might be more cost-effective due to lease mileage restrictions. If you prefer to always have a new car under warranty and lower monthly payments, leasing might be more appealing, even if the total cost over a long period is higher.
Summary over " + leaseTermMonths + " Months:
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"; resultHTML += "Lease Costs:
"; resultHTML += "- ";
resultHTML += "
- Lease Down Payment: $" + leaseDownPayment.toFixed(2) + " "; resultHTML += "
- Acquisition Fee: $" + leaseAcquisitionFee.toFixed(2) + " "; resultHTML += "
- Disposition Fee: $" + leaseDispositionFee.toFixed(2) + " "; resultHTML += "
- Total Monthly Lease Payments (incl. tax): $" + totalLeasePayments.toFixed(2) + " "; resultHTML += "
- Estimated Excess Mileage Cost: $" + estimatedExcessMileageCost.toFixed(2) + " "; resultHTML += "
Buy Costs (over " + leaseTermMonths + " months):
"; resultHTML += "- ";
resultHTML += "
- Purchase Down Payment: $" + buyDownPayment.toFixed(2) + " "; resultHTML += "
- Sales Tax on Purchase: $" + salesTaxAmountOnPurchase.toFixed(2) + " "; resultHTML += "
- Total Loan Payments (first " + leaseTermMonths + " months): $" + totalLoanPaymentsOverComparisonPeriod.toFixed(2) + " "; resultHTML += "
- Total Maintenance/Repair: $" + totalMaintenanceCost.toFixed(2) + " "; resultHTML += "
- Total Insurance: $" + totalInsuranceCost.toFixed(2) + " "; resultHTML += "
- Minus Estimated Resale Value: -$" + estimatedResaleValueAmount.toFixed(2) + " "; resultHTML += "