Lease vs Buy Calculator
Free tool to compare 10 year car lease vs buy costs, calculate invested difference opportunity cost, find break even year. No signup.
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How It Works
Enter lease details including monthly payment, term in months, upfront fees, down payment, and how many full lease cycles fit inside a ten year horizon. Enter buy details including purchase price, expected resale value after ten years, annual maintenance, loan rate, and loan term. Set your expected investment return rate to model opportunity cost when lease payments are lower than buy payments. Example: a $350 monthly lease on a $35,000 vehicle versus financing at five percent over five years. The tool amortizes the purchase loan, sums lease cycles, and tracks monthly payment differences invested at your return assumption.
Review ten year total lease cost, ten year total buy cost, monthly buy payment, invested difference from lower lease cash flow, break even year, and the year by year cumulative cost table. Lower lease payments free cash each month that compounds if invested. Higher resale value and lower maintenance favor buying. Stress test resale value down twenty percent and maintenance up fifty percent to see whether buying still wins. The break even year marks when cumulative buy cost falls below cumulative lease cost.
Higher resale value and lower maintenance favor buying. Stress test resale value down twenty percent and maintenance up fifty percent to see whether buying still wins. The break even year marks when cumulative buy cost falls below cumulative lease cost.
Use Lease vs Buy whenever inputs change: after market moves, new contributions, or revised personal assumptions. Bookmark the page for quick reruns without installing software.
Step by step
- Enter lease payment, term, fees, down payment, cycles, and buy price, resale, maintenance, loan rate, and term
- Set investment return rate and review ten year totals, monthly buy payment, and invested difference
- Inspect break even year and year by year table to stress test resale and maintenance assumptions
Worked example
Example scenario for Lease vs Buy: $350, $35,000. Enter those values above to reproduce the walkthrough described in How it works.
Adjust one input at a time to see sensitivity. Lease vs Buy updates instantly so you can stress test optimistic and conservative assumptions before acting.
When to use this calculator
Reach for Lease vs Buy when 10 year car lease vs buy cost with invested difference opportunity cost.. It suits quick what if analysis before trades, allocation changes, or plan updates.
Pair with related tools when the decision spans taxes, liquidity, or multi year projections beyond what one formula captures.
Common mistakes
Copying outputs without checking input units or stale market prices is a frequent error with Lease vs Buy. Confirm tickers, percentages, and dates before acting.
Running a single baseline scenario ignores tail risks. Stress test with conservative inputs and compare against related tools listed below when the decision is material.
The Formula
Monthly loan payment: P = L × r × (1 + r)^n / ((1 + r)^n - 1) where L = loan amount, r = annualRate / 12, n = termYears × 12
Lease 10yr total = (leaseDownPayment + leaseMonthly × leaseTermMonths + leaseFees) × leaseCycles
Buy 10yr total = buyPrice - resaleValue + maintenance × 10 + totalInterest
Invested difference: sum of monthly savings compounded at return rate for remaining months
Buy payment uses standard amortization. Lease total multiplies cycle cost by lease cycles in ten years. Invested difference compounds monthly savings at return rate. Does not model tax, insurance, or mileage penalties.
Limitations and assumptions
Buy payment uses standard amortization. Lease total multiplies cycle cost by lease cycles in ten years. Invested difference compounds monthly savings at return rate. Does not model tax, insurance, or mileage penalties. Lease vs Buy does not replace personalized advice. Fees, slippage, account specific rules, and behavioral constraints may change real world outcomes.
Key terms
- Is leasing always more expensive than buying
- Leasing offers lower monthly payments but you own nothing at lease end unless you buy out.
- What does the buy total include
- Buy total equals purchase price minus resale value plus total loan interest plus ten years of maintenance.
- Model assumption
- When lease monthly payment is lower than buy monthly payment, the difference is treated as invested each month at your return rate.
Compare alternatives
Model loan schedules with Amortization Ledger, compare broker trading costs with Broker Fee Matrix, and stress cash opportunity cost with Inflation Erosion on portfolios. Use those calculators when lease vs buy alone does not capture the full decision.
Internal links on portfolios.tools help you chain calculators: run Lease vs Buy first, then validate edge cases with a specialized tool from the related section below.
FAQ
Is leasing always more expensive than buying?
Leasing offers lower monthly payments but you own nothing at lease end unless you buy out. Buying means higher payments but you retain an asset with resale value. Over ten years the cheaper path depends on resale value, loan interest, maintenance, and whether you invest monthly savings from leasing. High mileage drivers face lease mileage penalties not modeled here. Buyers bear depreciation directly.
What does the buy total include?
Buy total equals purchase price minus resale value plus total loan interest plus ten years of maintenance. Buy monthly payment uses standard amortized loan formula on price minus down payment. Lease total sums down payment, monthly payments times term, fees, times number of lease cycles across ten years.
How does the invested difference work?
When lease monthly payment is lower than buy monthly payment, the difference is treated as invested each month at your return rate. Invested difference shows how much that monthly savings could grow over ten years. Leasing plus disciplined investing may beat buying on total wealth when invested difference is large.
What does the break even year tell me?
Break even year is the first year where cumulative buying cost drops below cumulative leasing cost. If break even exceeds ten years, leasing wins on cost within this horizon though ownership may still win on asset value not fully captured in cash cost alone.
What related calculators should I use?
Use Amortization Ledger for detailed loan schedules. Use Broker Fee Matrix if financing through a broker with trade related fees. Pair with Inflation Erosion when comparing cash down payment opportunity cost against investing the down payment instead.
How do I use this Lease vs Buy calculator on phone or tablet?
Yes. Lease vs Buy runs entirely in your mobile browser with the same formulas as desktop. Optional localStorage may remember inputs on your device when enabled in browser settings.
Where is my data stored when I use Lease vs Buy?
Nowhere on our servers. Calculations execute locally in your browser. Optional localStorage saves form fields on your device only and never transmits portfolio numbers over the network.
Should I rely on Lease vs Buy for tax or legal decisions?
No. Lease vs Buy provides educational math only. Tax law, account rules, and personal circumstances vary. Consult a qualified tax or legal professional before transactions with material consequences.
Related Tools
Model loan schedules with Amortization Ledger, compare broker trading costs with Broker Fee Matrix, and stress cash opportunity cost with Inflation Erosion on portfolios.tools when deciding vehicle lease versus finance purchase.