Is leasing worth it vs. buying?
A three-year comparison: what leasing costs, against what financing the same car costs after you subtract the value you'd still own.
Your numbers
The verdict
Assumes a 60-month loan and a 36-month lease. Estimates for education only — not financial advice.
Why the three-year window decides everything
Over exactly three years, leasing and buying are often surprisingly close. That's not an accident — a lease is priced to cover the car's depreciation over the lease term plus the lender's profit, and depreciation is the same cost a buyer absorbs. The difference is what happens at the end. The person who leased hands back the keys and owns nothing. The person who bought owns a car worth thousands of dollars.
That's why this calculator subtracts the car's remaining value from the cost of buying. If you sold the car at year three and paid off the loan, whatever's left is money back in your pocket — so it isn't a cost.
When leasing genuinely makes sense
- You want a new car every few years regardless. If you were never going to keep a car for eight years, comparing against that scenario is dishonest. Leasing is priced fairly for serial upgraders.
- You need predictable costs. A leased car is under warranty for essentially the whole term, so surprise repair bills mostly disappear.
- The car is for business use. Tax treatment can change the math meaningfully — worth asking an accountant, since rules vary.
- The specific lease is subsidized. Manufacturers sometimes prop up lease deals on particular models with inflated residual values, which quietly transfers money to you.
The costs leases hide
Mileage limits are the big one — typical leases allow 10,000 to 15,000 miles a year, and going over is charged per mile at the end. If you drive a lot, run your real annual mileage against the cap before anything else, because overage charges can erase the entire price difference. Wear-and-tear assessments at turn-in can add more. And a lease is difficult to exit early; if your life changes, you're often stuck paying it out.
Common questions
Should I put money down on a lease?
Generally no. A down payment on a lease buys you nothing you keep — and if the car is totaled early, that money is typically gone. Lower due-at-signing with a slightly higher monthly is usually the safer structure.
Is buying out my lease at the end a good idea?
It can be, if the buyout price set years ago is below what the car is actually worth now. Compare the residual in your contract against current market value for that model and mileage.
What's the cheapest way to have a car, period?
Buying a reliable used car and driving it for many years after it's paid off. It's rarely the most fun answer, but the math isn't close.