Loan vs Lease Calculator

Which is cheaper for the car you want?

How to use this calculator

Enter the car price, loan down payment, APR, term, lease term and lease payment, plus residual value, then press Compare. Buying and leasing costs appear with a verdict.

What the result means

The comparison nets the cost to own versus lease over the same period. Leasing costs less monthly but you own nothing; buying keeps the car's value.

How the two options are compared

A loan buys the car: you finance the price minus your down payment, own it after the term, and keep whatever resale value is left. A lease rents the car: you pay the car's depreciation over the lease term plus a rent charge, then hand it back (or buy it at the residual value).

What the calculator needs

• Loan side: car price, down payment, APR and term give the financed payment and total cost.
• Lease side: the lease payment you were quoted plus the residual value tells you what leasing actually costs over the term.

Worked example

A $35,000 car financed at 6.5% for 60 months with $3,000 down has a payment near $620, and after five years you own a car still worth roughly $16,000. Leasing the same car at $450/month over 36 months costs about $16,200 with nothing owned at the end - but always a newer car.

Which fits your driving

Leasing suits low-mileage drivers who want a new car every few years and the lowest payment. Financing suits anyone who keeps cars past payoff, drives a lot, or wants an asset at the end. Over the long run, buying and keeping is almost always cheaper.

Frequently asked questions

Is leasing ever the better deal?

Yes — if you change cars every 3 years and drive under the mileage limit, leasing can be cheaper monthly.

What's residual value?

The car's estimated value at lease end — it drives the lease payment and is the 'equity' you don't keep.

Can I buy the car at the end of a lease?

Yes, at the residual value set in the contract - sometimes a good deal if the car is worth more than the residual.