Is leasing or buying cheaper?

Leasing has lower monthly payments but you own nothing at lease end. Over 10+ years of car ownership, buying is almost always cheaper. Leasing makes sense for business deductions or if you prefer new cars every 3 years.

What is the money factor in a lease?

Money factor is the lease equivalent of an interest rate. Multiply by 2,400 to convert to approximate APR. A money factor of 0.00125 is approximately 3% APR.

What hidden costs does leasing have?

Mileage overage fees (typically $0.15-$0.30/mile over limit), wear-and-tear charges at lease end, early termination penalties, and gap insurance requirements.

Lease vs Buy Vehicle Calculator

Compare total 5-year cost of leasing vs buying a vehicle including depreciation, financing costs, and residual value. Determines the financially superior option.

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Annual Rate (%)

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$ Finance Disclaimer: These calculators are for educational and illustrative purposes only. Results do not constitute financial advice. Consult a licensed financial advisor before making investment or borrowing decisions.

How to Use

Enter the values for the scenario you are assessing. Compare total 5-year cost of leasing vs buying a vehicle including depreciation, financing costs, and residual value. Determines the financially superior option. Use the lease vs buy vehicle result to inform your calculation.

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Lease vs Buy Vehicle Calculator

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Frequently Asked Questions

Is leasing or buying cheaper?

What is the money factor in a lease?

What hidden costs does leasing have?