Buy vs Lease a Car (Lifetime Cost)
Example: Vehicle price: 35000 $ · Down payment (buy): 5000 $ · Loan APR: 7 % · Loan term: 5 yrs · Lease payment/mo: 450 $ · Lease due at signing: 3000 $ · Lease term: 36 months · Years you will drive: 10 yrs · Maintenance/yr (owned): 900 $ · Maintenance/yr (leased): 200 $ · Extra insurance/yr (owned): 0 $
| Leasing costs this much more | $24,843 |
| Total cost to buy & keep | $43,157 |
| Total cost to lease forever | $68,000 |
| Your car is worth (at end) | $6,485 |
| Verdict (1=buy, 0=lease) | 1 |
Worked example
A $35,000 car bought with $5,000 down at 7% and kept 10 years costs roughly its price plus interest and maintenance, minus a resale value of several thousand dollars. Leasing the same car at $450/month plus $3,000 down every 3 years means paying about $54,000+ over that decade — with nothing to show for it at the end.
Frequently asked questions
Is leasing ever the cheaper choice?
Rarely over a long horizon, but leasing can win if you always want a new car every 2–3 years, drive low miles, or need the car for a business write-off. This tool shows the exact dollar gap for your situation.
Why does buying win over 10 years?
Once the loan is paid off, an owned car keeps providing transportation at near-zero capital cost. A lease resets that cost every few years, so you never escape depreciation on the steepest part of the curve.
What resale value should I expect?
The tool models roughly a 20% first-year drop and about 15% per year after that, a common industry pattern. Well-maintained popular models hold value better; luxury and EVs often depreciate faster.