Lease
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Asset at end$0 (return car)
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Buy
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Full cost comparison
Every dollar compared side by side, including what you walk away with.
Frequently asked questions
When does leasing make financial sense?
Leasing can win when: you drive under the mileage limit, you value always having a new car with warranty, you're a business owner who can deduct the payments, or the residual value is set unusually high (meaning lower monthly payments). Leasing also makes sense if you'd invest the down-payment savings and earn more than the true cost difference.
What is the money factor?
The money factor is the lease equivalent of an interest rate. Multiply it by 2400 to get the APR equivalent. A money factor of 0.00125 = 3% APR. A money factor of 0.0035 = 8.4% APR. Dealers don't always volunteer this number — ask for it directly to compare fair market rates.
What is residual value?
Residual value is what the leasing company estimates the car will be worth at the end of the lease term — expressed as a percentage of MSRP. A higher residual means lower monthly payments because you're financing less depreciation. It's also the price at which you can buy the car at lease-end.
Why does buying usually win long-term?
After your loan is paid off, you own an asset. With leasing, payments never stop — you're perpetually renting. Over 10 years, the buy-and-hold strategy (especially keeping the car several years after payoff) almost always results in significantly lower cost per mile driven compared to continuous leasing.
What about mileage penalties?
Leases typically allow 10,000–15,000 miles/year. Overages cost $0.15–$0.30 per mile. If you drive 20,000 miles/year and your lease allows 12,000, that's $1,200–$2,400/year in penalties — which can completely flip the financial comparison. This calculator assumes you stay within mileage limits.