Car Lease vs Buy Calculator
Compare leasing a car against buying over the same horizon: lease payment from the money factor, loan payment, mileage overage and net cost after equity.
Lease terms
Purchase terms
Cost over the comparison horizon
| Line | Lease | Buy |
|---|---|---|
| Up-front cash | $3,095 | $5,000 |
| Monthly payment | $419.14 | $601.14 |
| Finance charge / interest | $3,389 | $5,000 |
| Mileage overage | $2,250 | $0 |
| Total cash out | $20,434 | $26,641 |
| Value you still own | $0 | $4,841 |
| Net cost after equity | $20,434 | $21,800 |
| Monthly-equivalent cost | $567.61 | $605.55 |
The lease payment uses the standard money-factor formula: depreciation (net cap cost − residual) ÷ term, plus a finance charge of (net cap cost + residual) × money factor. Buying is measured as cash paid minus the equity you still hold at the horizon, so the two are compared on the same basis. Sales tax, registration, insurance, maintenance and wear-and-tear charges are excluded and differ by state and country. Estimates only, not financial advice.
What is the Car Lease vs Buy Calculator?
The ByteTools Car Lease vs Buy Calculator puts both options on the same footing. The lease side uses the standard industry formula: depreciation is the net capitalized cost minus the residual divided by the term, and the finance charge is the net cap cost plus the residual multiplied by the money factor.
- Lease payment from the standard depreciation-plus-money-factor formula
- Mileage overage priced from your annual driving versus the allowance
- Loan amortised with only the payments inside the horizon counted
- Net cost after subtracting the equity you still own when buying
- Monthly-equivalent cost so the two paths compare like for like
- Private in-browser math; estimates only, not advice
How to use the Car Lease vs Buy Calculator
- 1
Enter the vehicle's sticker price, the comparison horizon in months and how far you drive each year.
- 2
Fill in the lease terms: capitalized cost, cash down, residual percentage, money factor, fees and mileage allowance.
- 3
Fill in the purchase terms: down payment, loan APR, loan term and the expected resale percentage at the horizon.
- 4
Read the two monthly payments and the two net costs in the stat row.
- 5
Work down the comparison table to total cash out, equity retained, net cost and monthly-equivalent cost.
About the Car Lease vs Buy Calculator
The ByteTools Car Lease vs Buy Calculator puts both options on the same footing. The lease side uses the standard industry formula: depreciation is the net capitalized cost minus the residual divided by the term, and the finance charge is the net cap cost plus the residual multiplied by the money factor. Acquisition fees and mileage overage charges are added on top.
The buy side amortises a car loan over your chosen term, counts only the payments actually made within the comparison horizon, and then subtracts the equity you still hold — the car's resale value minus whatever is left on the loan. That is the crucial difference: at the end of a lease you own nothing, while a purchased car is still an asset.
The result is a full line-by-line table ending in net cost after equity and a monthly-equivalent figure for each path, so the comparison is not distorted by the lease's lower sticker payment. Tax, registration, insurance and maintenance are excluded since they vary by location. Everything runs locally in your browser. Estimates only, not financial advice.
Frequently asked questions
Is it cheaper to lease or buy a car?
Leasing usually has the lower monthly payment, but buying often wins on net cost because you still own something at the end. The answer flips depending on how long you keep the car — this calculator settles it by comparing net cost after equity over the horizon you choose.
How is a car lease payment calculated?
Two parts added together: depreciation, which is the net capitalized cost minus the residual value divided by the number of months, and a finance charge, which is the net cap cost plus the residual multiplied by the money factor. This tool shows both components.
What is a money factor and how does it relate to APR?
The money factor is how leases express their interest rate. Multiply it by 2400 to get the approximate APR — a money factor of 0.0018 is about 4.3%. Dealers sometimes quote it without explanation, so converting it is the fastest way to see whether a lease is competitively priced.
What happens if I go over the mileage on a lease?
You pay a per-mile charge at the end, commonly 15 to 30 cents. This calculator multiplies your excess miles over the whole term by the rate you enter, and it can easily add up to thousands — which is often what tips a high-mileage driver toward buying.
Does this include tax, insurance and maintenance?
No. Sales tax treatment differs between leasing and buying and varies by state and country, and insurance and maintenance depend on your circumstances. Those are deliberately excluded so the comparison focuses on the financing structures themselves.
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