Compare the cost of leasing vs buying a car
This auto lease calculator compares the total cost of leasing versus buying a car. It breaks down your monthly lease payment into depreciation fee, finance fee, and sales tax, then compares the lease total cost with a standard auto loan. Deciding whether to lease or buy a car depends on your driving habits, budget, and how often you like to change vehicles. This calculator breaks down the full lease payment into depreciation, finance fee, and tax components, then compares the total cost with buying the same car.
Monthly lease payment equals depreciation plus finance charge plus tax. The calculator then compares total lease cost with a 60-month auto loan at 5% APR.
The money factor is the interest rate equivalent in a lease. To convert APR to money factor, divide the APR by 2400. For example, 6% APR equals a money factor of 0.0025.
Leasing has lower monthly payments but you do not own the car. Buying costs more per month but builds equity. Leasing makes sense if you want lower payments and a new car every few years.
A money factor of 0.00125 (3% APR) or lower is excellent, 0.00167 (4% APR) is average, and 0.0025 (6% APR) or higher is expensive. Negotiate the money factor just as you would an interest rate.
Most leases include 10,000-15,000 miles per year. Exceeding the limit incurs excess mileage fees of $0.15-$0.30 per mile. Choose a higher mileage allowance if you drive more.
Residual value is the predicted value of the car at lease end. A higher residual value lowers your monthly payment because you are financing less depreciation. Luxury cars typically have lower residuals.
Yes, lease payments are negotiable. You can negotiate the selling price, money factor, residual value (set by the manufacturer), and the acquisition fee. Always negotiate the price before discussing monthly payments.