# Lease vs Buy Car Calculator: True Total Cost Comparison

Canonical: https://themathsays.com/calculators/lease-vs-buy-car-calculator/

> Lease vs buy a car? Free calculator compares true total cost over 8-12 years, the full-horizon comparison your dealer won't run.

**The dealer comparison most people see:** "Lease for $399/month or buy for $649/month." Looks obvious. But that's the wrong frame. The lease ends in 36 months and you have nothing. The 60-month loan ends and you have a paid-off car worth ~$15,000-$20,000. The math has to run the full clock.

Vehicle MSRP / Purchase price ($)

Down payment if buying ($)

Auto loan rate (%)

Auto loan term (years)

Lease monthly payment ($)

Lease down payment / drive-off ($)

Lease term (months)

Your annual mileage

Lease mileage allowance (miles/year)

Comparison horizon (years)

Compare over 8-12 years (the lifetime of a held vehicle).

Estimated car value after horizon ($)

If buying and holding. After 10 years, typical = 20-30% of MSRP. Toyota / Honda hold value better.

## How this works

Three scenarios:

- **Buy:** down payment + (monthly payment × loan months) + maintenance after warranty − value at horizon.

- **Lease:** repeated leases over the horizon. Each cycle: down + (monthly × term) + disposition fee + any excess mileage. Then repeat with a new lease.

- **Excess mileage:** if your real mileage exceeds the lease allowance, that's an extra cost at every turn-in ($0.20/mile typical).

**The math the dealer won't run:** a 36-month lease at $399 with $3,000 down means your effective monthly cost is ~$483, and at the end you have nothing. A 60-month purchase at $649 means your effective cost is ~$650 for 5 years, then $0 for the next 5 years, and at the end you have $8,500 of car. Over 10 years, the buyer paid less AND owns a vehicle.

## The verdict logic

- **✅ Buy:** long horizon, modest excess mileage, typical residual values. The default answer for most personal-use drivers.

- **⚠️ Depends:** short horizon (under 6 years), high-residual brand, or you legitimately value the always-new-car experience.

- **✅ Lease:** the rare case: business expense with full deduction, OR you genuinely turn the car over every 3 years regardless.

If you decide to buy

Auto loan rates
Capital One Auto

## FAQ

Why is lease vs buy a long-horizon comparison?

Three-year lease vs three-year financed-purchase always favors the lease. You only pay for depreciation, not full ownership. The real comparison is leasing-forever vs buying-and-holding 8-12 years. Over that horizon, buying typically wins by tens of thousands.

When does leasing make sense?

When you genuinely want a new car every 3 years and accept that you're paying a premium for that. Or for a business expense where the lease payment is fully deductible. For most personal-use buyers, it's a worse deal in dollars but a better experience.

What about lease residual values?

The residual is the predicted value of the car at lease-end, set by the leasing company. The lease payment covers (MSRP − residual + interest + fees) ÷ months. Higher residuals = lower payments. Some makes (Toyota, Honda) have notably higher residuals.

Mileage limits: how much do they cost?

Typical excess-mileage charge: $0.15-$0.30/mile. If your real driving is 15k/year and you took a 12k/year lease, that's 9k extra miles over a 3-year lease = $1,350-$2,700 you owe at turn-in. The calculator includes this.

What's not in this calculator?

Maintenance differences (warranty covers most of the lease period, you pay all maintenance on a held-long buyer-side). Disposition fees ($300-$500 at lease end). Wear-and-tear charges. These all tilt slightly in favor of buying-and-holding.

What about buying out the lease at the end?

If the lease residual happens to be below market value (common when used-car prices spike), buying out the lease can be smart. But you can't reliably plan on that 3 years in advance.