Lease vs Buy Car Calculator (Break-Even by Mileage)
Enter lease and loan terms to see which is cheaper over the period.
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Lease vs Buy Car Calculator (Break-Even by Mileage) by TheCalcTools
How the Lease vs Buy Car Calculator (Break-Even by Mileage) works
Lease cost = due at signing + monthly payments + any mileage overage.
Buying cost is your down payment and loan payments, minus the equity you have at the end, which is the resale value minus the loan balance still owed.
Compare the two over the same number of months.
The formula
Worked example
Using the default values shown in the calculator:
| Period compared (months) | 36 |
|---|---|
| Lease monthly payment | $420 |
| Lease due at signing | $2000 |
| Miles you drive per year | 14000 |
| Lease miles allowed per year | 12000 |
| Overage fee per mile | $0.25 |
| Purchase price | $34000 |
| Down payment | $4000 |
| Loan APR | 6.5 % |
| Loan term (months) | 60 |
| Resale value at the end of the period | $21000 |
- Lease over 36 months: $2,000 + $420 × 36 + $1,500 overage = $18,620.
- Buy: payments of $587 a month, minus the equity at the end. Net cost $17,308. Buy is cheaper by $1,312.
Result:
| Total lease cost | $18,620 |
|---|---|
| Net cost of buying | $17,308 |
| Cheaper option saves | $1,312 |
| Cheaper over this period | Buy |
| Loan payment per month | $587 |
| Lease cost per month | $517 |
| Buy cost per month | $481 |
| Mileage overage charge | $1,500 |
Frequently asked questions
Is leasing ever cheaper?
Often for the first few years, especially if you drive low mileage and like a new car. Buying wins if you keep the car long after the loan ends.
What about taxes, insurance and maintenance?
These are left out because they are similar either way. Add them if they differ for you.
Sources and further reading
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This calculator gives estimates for information only. Check important results independently before you rely on them. See our disclaimer.