Why lease vs buy is a total-cost question
Monthly payment alone misleads. Buying builds equity (or leaves you with a loan balance); leasing returns the car and may charge for miles or wear. This calculator estimates net cost over a horizon: for buying, cash paid minus equity after an assumed sale; for leasing, cap reduction plus payments plus a simple excess-mile estimate.
Money factor × 2400 ≈ APR-equivalent. Residual percentage × MSRP sets the contractual end value that drives depreciation in the payment. Read lease vs buy decision framework, money factor explained and residual value and mileage penalties.
When leasing often wins
You want a new car every two to four years, keep miles within the allowance, maintain the car carefully, and negotiate cap cost as hard as a purchase price. Manufacturer subsidized money factors can beat retail APRs.
When buying often wins
You drive high miles, keep cars 6+ years, like to modify vehicles, or can buy a quality used car with cash or a short loan. After the loan ends, ownership years have no “payment” beyond operating costs.
How to use this tool
Enter realistic numbers from quotes, your current loan statement or a dealer worksheet — not round guesses when precision matters. Results update as you type and stay in your browser; nothing is uploaded to our servers. Screenshot or write down the output with the date so you can compare later.
Change one input at a time when you are comparing scenarios. That makes cause and effect obvious. If you share the result with a partner or credit-union loan officer, share the inputs too so nobody debates a black-box number.
This page is general information and arithmetic, not personalised credit advice. Rates, fees, tax rules and dealer programs change. When an official source or your contract disagrees with text here, trust the contract and the official source, and tell us via the contact page so we can fix the page.
What the numbers mean
Read every label carefully. APR is not the same as a money factor. Cap cost is not the same as MSRP. A residual percentage is a contractual estimate of end-of-lease value, not a promise of what a buyer would pay you for a car you own. Amortization schedules round differently across lenders.
Use related guides on this site for the “why” behind the math. Sister sites on dollarfinch.com cover other money jobs — for example paycheck withholding on Take-Home Clarity, cash parking on CashLadder, and year-end tax moves on Year-End Moves. AutoLane stays focused on vehicle financing arithmetic.
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Good habits before you sign
Get a prequalification or preapproval from a bank or credit union before you visit a dealer so you have an independent APR to compare. Ask for the out-the-door price before talking about monthly payments. Read every add-on (extended warranty, GAP, paint protection) as an optional product with a price — not as a required line.
Do not paste Social Security numbers, full account numbers or passwords into any web form, including ours. We do not ask for them. For refinance shopping, you can usually prequalify with soft-pull tools from lenders; confirm how each lender checks credit.
If something looks wrong, include the URL and the inputs you used when you contact us. We correct factual mistakes and update the “last updated” stamp. We do not broker loans, pull credit, or negotiate with dealers on your behalf.
Limits of this calculator
Models are simplified on purpose so you can understand them. State tax on trade-ins, acquisition fees, documentary fees, lender overlay rules, balloon structures and commercial leases may need the lender’s own worksheet. Multi-state moves and business-use vehicles add more complexity.
Thanks for using a free tool responsibly. When you are ready, scroll back to the form, enter your numbers, and keep a copy of the output with your shopping notes.