What You Need to Know
Why This Calculator Matters
Leasing can mean lower payments but you build no equity. Understanding lease math reveals when it makes sense and when buying wins.
Who Needs This
Car shoppers comparing lease vs. buy, those who want a new car every few years, or business owners considering vehicle options.
Key Insight
Leasing costs more long-term because you always have a payment. Buying and keeping a car for 10 years is almost always cheaper.
Common Mistake
Exceeding mileage limits. Going over by 5,000 miles at 25¢/mile costs $1,250 at lease end - often a surprise expense.
Pro Tip
Negotiate the selling price (capitalized cost) just like buying. A lower cap cost means lower payments. Don't focus only on monthly payment.
Real-World Example
Scenario: $35,000 car, 36-month lease
Lease: $350/month × 36 = $12,600 + $2,000 upfront. Buy with 5-year loan: $650/month × 60 = $39,000
Lease costs less monthly but after 6 years (2 leases vs. 1 buy), leasing cost $29,200 with no car. Buying: $39,000 but you own a car worth ~$15,000.
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