Car Lease vs Buy Calculator — Formula
## Leasing vs Buying a Car
Leasing has lower monthly payments but builds no equity. Buying costs more monthly but you own an asset at the end.
### Comparison
**Total Lease Cost = Monthly Payment x Term Months** (you own nothing at the end)
**Net Buy Cost = Total Payments - Residual Value** (you keep the car)
The true comparison is total lease outflow vs (total loan payments minus the car's remaining value). If the car retains value well, buying usually wins long-term.
Leasing has lower monthly payments but builds no equity. Buying costs more monthly but you own an asset at the end.
### Comparison
**Total Lease Cost = Monthly Payment x Term Months** (you own nothing at the end)
**Net Buy Cost = Total Payments - Residual Value** (you keep the car)
The true comparison is total lease outflow vs (total loan payments minus the car's remaining value). If the car retains value well, buying usually wins long-term.
Esempio Risolto
$35,000 car, $350/mo lease vs $600/mo loan, 36-month term, 55% residual.
- Total lease = $350 x 36 = $12,600 (nothing to show for it)
- Total loan payments = $600 x 36 = $21,600
- Car value at end = $35,000 x 55% = $19,250
- Net buy cost = $21,600 - $19,250 = $2,350
- Buying costs $10,250 less when accounting for equity