Buy vs. Lease Auto Calculator Methodology

The calculator estimates the total cost of buying versus leasing over the selected comparison term. It also estimates average monthly cost, end-of-term equity, mileage charges, lease buyout cost when selected, and when buying may move ahead of leasing in the modeled timeline.

Buying costs include the down payment, simulated loan payments, insurance, maintenance and repairs, and an end-of-term equity adjustment. Taxes, purchase fees, registration, title fees, trade-in equity, and negative trade-in equity affect the financed amount.

Lease costs include due at signing, acquisition and disposition fees, monthly lease payments, insurance, maintenance if it is not included, excess mileage charges, wear and tear charges, and optional buyout cost. Security deposits are shown separately because they may be returned.

Loan payments use a standard amortized loan formula based on financed amount, APR, and loan term. If APR is 0%, the calculator divides principal evenly across the loan term.

payment = principal * (monthlyRate * (1 + monthlyRate)^n) / ((1 + monthlyRate)^n - 1)

Trade-in equity is the trade-in value minus the trade-in loan payoff. Positive equity reduces the financed amount. Negative equity increases the financed amount.

The buy option subtracts estimated end-of-term equity from total cost. Equity is calculated as expected resale value minus the remaining loan balance at the end of the comparison term.

Allowed lease miles are calculated from the lease mileage allowance and comparison term. If estimated miles exceed the allowance, the calculator multiplies excess miles by the entered fee per mile.

If the buyout comparison is enabled or the selected end plan is to buy out the vehicle, the entered buyout price is included as an end-of-term lease cost. The calculator does not evaluate whether a buyout price is favorable.

The calculator builds a month-by-month timeline. Buying includes upfront cost, loan payments, insurance, maintenance, and estimated equity. Leasing includes upfront costs, monthly payments, insurance, maintenance, and proportional end-of-term costs. Break-even is the first month where the buy cumulative cost is less than or equal to the lease cumulative cost.

This MVP does not include exact dealer fees, exact lease money factor calculations, exact tax treatment by state, exact insurance underwriting, exact depreciation by model, warranty coverage differences, repair surprises, credit approval or loan eligibility, or professional vehicle-buying advice.

This calculator uses user-entered assumptions and simplified total-cost modeling. Dealer lease structures, taxes, fees, and incentives can vary widely.

These calculators are for educational purposes only and are not financial, tax, legal, insurance, investment, real estate, employment, medical, childcare, vehicle-buying, or professional advice.

This calculator is for educational purposes only and is not financial, tax, legal, insurance, vehicle-buying, leasing, or professional advice. Use it as a planning estimate and review actual loan, lease, insurance, and dealer terms before committing.