When does leasing make more sense than buying?

Leasing is often better when you want to preserve cash, need the latest equipment/technology frequently, or the item depreciates quickly. Buying is usually better if you plan to keep the asset long-term and want to build equity.

What costs should I include in a lease vs buy analysis?

For buying: down payment, loan payments, maintenance, insurance, residual value. For leasing: monthly payments, fees, mileage charges (for vehicles), and opportunity cost of the down payment money.

Lease vs Buy Calculator

Compare the total cost of leasing versus buying a vehicle over time. Analyze which option saves you the most money.

Lease vs Buy

Smart Vehicle Finance Calculator

Lease Monthly

$700

Buy Monthly

$798

Best Value

Lease

Recommendation

Buying is significantly cheaper for long-term ownership.

Lease saves you $24,049 over 7 years

Lease

36 months

Monthly Payment

$700

$450 lease + $250 operating

Down Payment$2,000

Total Lease Payments$16,200

Sales Tax$1,377

Operating Costs$9,000

Total Cost$28,577

Lower monthly payments

Always under warranty

No ownership equity

Mileage restrictions

Buy

60 month loan, keep 7 years

Monthly Payment

$798

$548 loan + $250 operating

Down Payment + Tax$9,975

Total Loan Payments$32,871

Interest Paid$4,871

Operating Costs$21,000

Resale Value-$11,220

Net Cost$52,626

Build ownership equity

No mileage limits

Higher monthly payment

Depreciation loss

Cost Comparison

Cost Over Time

Vehicle & Lease

Vehicle Price: $35,000

Sales Tax: 8.5%

Lease Payment: $450/mo

Lease Down Payment: $2,000

Lease Term

Annual Mileage: 12,000

Purchase Options

Down Payment: $7,000 (20%)

Interest Rate: 6.5%

Loan Term

Years to Keep: 7

Annual Depreciation: 15%

Resale after 7 years: $11,220

Monthly Insurance: $150

Monthly Maintenance: $100

Key Insights

Lease if: You drive under 12k miles/year, want new cars every 3 years, prefer lower payments

Buy if: You keep cars 5+ years, drive high mileage, want to build equity

Multiple leases: Can cost 2-3x more than buying if repeated over many years

Hidden costs: Lease has acquisition fees, disposition fees, excess wear charges

Understanding Lease vs Buy Calculator

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Key Terms You Should Know

Key Term 1

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How It Works

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8 Best Practices

8 Common Mistakes to Avoid

Frequently Asked Questions

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