True net cost, not just monthly payments
Leasing usually offers lower monthly payments, but you own zero equity at the end. This calculator compares what you actually retain vs spend.
Car Lease vs Finance Calculator
Compare leasing vs buying a car. Calculate true total costs factoring in monthly payments, down payment, residual value, equity, and depreciation over 3 to 7 years.
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How to use Car Lease vs Finance Calculator
- 1
Enter the negotiated vehicle purchase price and local sales tax rate.
- 2
Configure the lease scenario: down payment, term length (months), money factor or APR, and estimated residual value percentage.
- 3
Configure the finance (loan) scenario: down payment, loan APR, term length, and expected vehicle resale value at term end.
- 4
Compare monthly payment amounts and cumulative out-of-pocket costs.
- 5
Examine the net true cost after accounting for vehicle equity owned at the end of the financing period.
Why use this tool?
Cumulative cost timeline chart
A multi-year visual chart shows exactly when financing overtakes leasing in financial advantage due to paid-off vehicle equity.
Flexible APR or money factor conversion
Supports standard car loan APRs as well as dealer lease money factors (Money Factor = APR / 2400).
Frequently asked questions
Is it better to lease or finance a car?
Financing is almost always cheaper in the long run if you plan to keep the car for 5 or more years, because you own the vehicle once the loan is paid off. Leasing is suitable if you prefer driving a new car under warranty every 3 years, want lower monthly payments, or can write off lease payments as a business expense.
How do I convert a lease money factor to an interest rate (APR)?
Multiply the money factor by 2,400. For example, a money factor of 0.0025 equals an APR of 6.0% (0.0025 × 2400 = 6.0).
What is residual value in a car lease?
Residual value is the predicted market value of the vehicle at the end of the lease term, expressed as a dollar amount or a percentage of the original MSRP. A higher residual value results in lower monthly lease payments.
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