Car Buy vs Lease Calculator

The break-even point is when the cumulative cost of buying equals the cumulative cost of leasing. Beyond this point, buying is usually cheaper because you stop making payments once the loan is paid off, while leasing repeats every few years. This calculator shows exactly when this happens based on your inputs.

The money factor is the lease equivalent of an interest rate. To convert to APR, multiply by 2400. For example, a money factor of 0.0025 = 6% APR. Check your lease agreement for this number.

Lease if you want lower monthly payments, drive within the mileage allowance, and prefer new cars every 2-3 years. Buy if you plan to keep the car 5+ years, drive a lot, or want to build equity you can later resell.

You return the car, pay a disposition fee, and pay for excess mileage (typically $0.15-0.25/mile) and wear-and-tear. You can also choose to buy the car at the residual value specified in your lease.

When you buy, you build equity as you pay down the loan while the car depreciates. Equity is the depreciated market value of the car minus the loan balance still owed. When you lease, you build no equity — you only pay for depreciation during the term.

Leases often include warranty coverage for the entire term. When you buy, maintenance costs start mounting after the warranty expires. This calculator applies your annual maintenance estimate to both paths for a fair comparison.

Leases cap your annual mileage (typically 10k-15k). Every mile over the allowance costs roughly $0.15-0.25. If your expected driving exceeds the allowance, those excess-mileage fees can make leasing far more expensive — buying avoids them entirely.