Loan Vs Lease Calculator
Same car, same sticker, two very different bills. This loan vs lease calculator builds both payments from the same vehicle price, splits the lease payment into depreciation and finance charge, translates the money factor into an APR you can compare with loan rates, and calls the winner on net cost after the equity a buyer keeps, not on the monthly payment a dealer advertises.
Vehicle
Loan
Lease
Money factor 0.002 ≈ 4.80% APR.
Estimate only. Taxes, fees and money factors vary by dealer, lender and state; confirm with your actual quotes.
Quick Answer
On a $35,000 car with $3,000 down and no tax or trade, the loan at 5% APR over 60 months costs $603.88 a month, $39,232.77 in total, and nets to $19,232.77 after the car’s $20,000 end value. The lease at a 0.002 money factor (4.80% APR) over 36 months with a $20,000 residual costs $437.33 a month ($333.33 depreciation plus $104.00 finance charge), $18,744.00 in total, with no equity. Verdict on these terms: lease wins by $488.77 on net cost, a result the horizon section below shows flipping the moment the terms are matched. The calculator above is pre-filled with this exact deal.
Key takeaways
- Judge on net cost, not the monthly payment. The lease here is $166.55 a month cheaper and still only wins by $488.77 once the buyer’s $20,000 of equity is counted.
- A money factor is just an APR in disguise: multiply by 2,400. This tool accepts either form and, after a fix documented on this page, both forms now give identical results.
- The verdict is hostage to two inputs you supply: the car’s end value and the mismatch between a 60-month loan total and a 36-month lease total. Change either and the winner can change.
- Market context: Experian put the average new-car lease payment at $619 a month against $770 for a new-car loan in early 2026. Lower payments are the norm for leases; lower total cost is not.
- Quick Answer
- How to use the loan vs lease calculator
- How each payment is built
- A fix worth noting: the APR form of the lease rate used to double-count
- Worked example: the $35,000 car, both quotes side by side
- The verdict depends on the horizon, and on one guess
- What this comparison leaves out, stated plainly
- Leasing versus buying: the trade-offs that are not in the numbers
- What competing calculators miss
- Frequently asked questions
- Add This Calculator to Your Website
- References
How to use the loan vs lease calculator
Enter one car and two real quotes for it, then click Compare. Results stay hidden until you do.
- Vehicle: the negotiated price, your tax rate, cash down and any trade-in. Price plus tax, minus down and trade, is the amount both sides start from: $32,000 in the worked example.
- Loan: the term in months, the APR, and your honest estimate of what the car will be worth at the end of the comparison. That last field is the buyer’s equity, and it is the single most argued-over number in any lease-versus-buy comparison.
- Lease: the term, the rate in either form (money factor or APR, the field accepts both), the residual from the lease quote, and the yearly mileage allowance.
- Read the verdict line first, then the split. The lease line shows depreciation and finance charge separately, so you can see whether a high payment is the car losing value or the rate being marked up. Checking a payment quote against a full amortization is a job for the car payment calculator, which lays a loan out month by month.
How each payment is built
The loan payment is standard amortization on the financed amount. The lease payment is two charges added together: what the car loses while you drive it, and a finance charge on the money tied up in it.
Loan payment = Financed × r(1+r)n ÷ ((1+r)n − 1), where r = APR ÷ 12 and n = loan months (at 0% APR, simply Financed ÷ n)
Depreciation charge = (Financed − Lease residual) ÷ Lease months
Finance charge = (Financed + Lease residual) × Money factor
Lease payment = Depreciation charge + Finance charge
Loan net cost = (Loan payment × months) + Down + Trade − End value | Lease net cost = (Lease payment × months) + Down
The finance-charge formula is the standard lease construction that federal disclosure rules assume: Regulation M requires the lessor to show you the capitalized cost, the residual value, the depreciation and the rent charge as separate items before you sign, per the CFPB’s Regulation M disclosure text at section 1013.4. If a dealer’s worksheet will not split the payment this way, that is information in itself. The rate conversion works because the finance charge is levied on the average of the starting and ending values, which is why the lease factor calculator uses the same 2,400 relationship between the two ways of quoting it.
A fix worth noting: the APR form of the lease rate used to double-count
Entering the same lease rate two equivalent ways used to give two different answers on this page, and the fix is documented here because it changed published outputs. A money factor of 0.002 and an APR of 4.8% are the same rate (0.002 × 2,400 = 4.80). Before the fix, the money-factor form produced a $104.00 finance charge on the worked example, while the APR form produced $208.00, exactly double, and flipped the verdict from lease wins by $488.77 to loan wins by $3,255.23.
The error was the conversion: the APR form divided the percentage by 1,200 (the loan convention, APR ÷ 100 ÷ 12) instead of by 2,400, the lease convention that accounts for the charge falling on the average balance. The calculator now divides an APR entry by 2,400, so 4.8 and 0.002 produce byte-identical results, verified in testing at 4.80% and again at 7.20% against 0.003. Money-factor entries were never affected, and no other output changed. One boundary survives the fix and is worth knowing: the switch between the two forms sits at 1, so a value of exactly 1 is read as a money factor, and an APR below 1% cannot be entered in APR form.
Worked example: the $35,000 car, both quotes side by side
Every figure below is the tool’s own output on the pre-filled inputs: $35,000 price, $3,000 down, no tax, no trade, a 60-month 5% loan against a 36-month lease at a 0.002 money factor, both residuals at $20,000.
| Line | Loan (60 months) | Lease (36 months) |
|---|---|---|
| Monthly payment | $603.88 | $437.33 |
| Depreciation part of payment | n/a (whole price is financed) | $333.33 |
| Finance charge / interest part | $4,232.77 total interest | $104.00 per month |
| Total paid (payments plus down) | $39,232.77 | $18,744.00 |
| Value you keep at the end | $20,000.00 | $0 |
| Net cost | $19,232.77 | $18,744.00 |
| Rate, translated | 5.00% APR | 4.80% APR equivalent, $0.52 per mile |
The two bar pairs tell the whole story of this comparison: the payment gap is wide, the net-cost gap is a sliver, and the sliver points the other way from the usual rule of thumb because of the terms fed into it. Which brings up the section most lease-versus-buy pages skip.
The verdict depends on the horizon, and on one guess
The tool totals each side over its own full term, so the worked example charges the loan 60 payments against the lease’s 36 and credits the buyer with a $20,000 car at the end. That is a legitimate cash comparison, but it is not a like-for-like one, and small changes flip it, as these verified re-runs of the same deal show.
| Change one thing | Loan net cost | Lease net cost | Verdict |
|---|---|---|---|
| Worked example, as pre-filled | $19,232.77 | $18,744.00 | Lease wins by $488.77 |
| Loan term matched to 36 months | $17,526.47 | $18,744.00 | Loan wins by $1,217.53 |
| End value $15,000 instead of $20,000 | $24,232.77 | $18,744.00 | Lease wins by $5,488.77 |
| End value $25,000 instead of $20,000 | $14,232.77 | $18,744.00 | Loan wins by $4,511.23 |
Two honest readings follow. First, the end value is a forecast, and the lease end value calculator exists precisely because that forecast is where lease pricing is won and lost. Second, a buyer who keeps the car past the loan term stops paying entirely, while a lessee signs the next lease: over two back-to-back leases this tool’s lease side would need a second full run, and the loan’s advantage compounds. The auto loan principal payment calculator shows the other half of that picture, how much of each loan payment is principal building that end value.
What this comparison leaves out, stated plainly
The tool models payments, one tax treatment and equity. A real decision has more moving parts, and pretending otherwise is how lease comparisons mislead.
- Fees: acquisition fees, disposition fees and dealer add-ons are not inputs. The Federal Trade Commission’s leasing guidance tells consumers to ask about charges for excessive mileage, wear and tear, disposition and early termination before signing, and none of those are in this math.
- Tax pattern: the tax field is charged once on the full price for both sides. Many states tax only the lease payments, month by month, which would lower the lease side’s financed amount relative to what is shown here.
- Trade-in asymmetry: a trade-in reduces the amount financed on both sides, and the loan total counts the trade as part of its cost, while the lease total counts only the cash down. A large trade therefore flatters the lease side of the verdict. It is the tool’s published convention, kept and flagged here rather than silently changed.
- No residual sanity check: enter a lease residual above the amount financed and the depreciation line goes negative. On a $20,000 car with a $25,000 residual and a 0.001 money factor, the tool prints a lease payment of -$93.89 a month. Real residuals never exceed the capitalized cost like that; if your quote produces a negative line, a figure was typed into the wrong field.
- Mileage is context, not cost: the miles field moves only the cost-per-mile line ($0.52 in the worked example, $0.42 at 15,000 miles a year). Overage at $0.15 to $0.30 a mile can add thousands at turn-in and is not priced.
- Ties go to the lease: when the two net costs are exactly equal, the verdict line reads Lease wins by $0.00. An exact tie is a coin toss in real life too; treat it as one.
Leasing versus buying: the trade-offs that are not in the numbers
Cost is one axis. Warranty coverage, mileage freedom, and how long you keep cars are the others, and they regularly outweigh a few hundred dollars of net cost.
Leasing: where it wins
- Lower monthly payment on the same car ($437.33 against $603.88 in the worked example)
- A new car every two to three years, usually inside the factory warranty
- Depreciation risk sits with the leasing company, not with you
- No selling or trading hassle at the end: hand back the keys
Leasing: where it bites
- You finish with no equity, every time
- Mileage caps, with $0.15 to $0.30 a mile for overages, plus wear charges
- Cash down is at risk if the car is totaled early in the term
- Early exit is expensive, and payments never stop while you keep leasing
Buying: where it wins
- Every payment builds equity toward a car you own outright
- Unlimited miles, your choice of maintenance, sell or trade whenever you like
- Once the loan ends, the payment ends, and the car keeps working
- Net cost usually lower for anyone who keeps a car five years or more
Buying: where it bites
- Higher monthly payment and more cash tied up at the start
- You carry the depreciation and resale risk yourself
- Repairs after the warranty are yours
- Selling an aging car takes time a lease return does not
Experian’s market data underlines how normal both paths are: leases accounted for about a quarter of new-vehicle financing in early 2026, per its State of the Automotive Finance Market reporting, with average payments of $619 for a lease against $770 for a loan. The averages describe the market; the verdict for your deal still comes out of your two quotes and your end-value estimate.
What competing calculators miss
The lease-versus-buy field splits into lease-only tools with a buy footnote and buy-versus-lease tools that hide their assumptions. Both habits hide the deciding numbers.
- Calculator.net’s auto lease calculator: the most complete lease math in the field, with monthly tax, upfront tax and a purchase comparison under the same conditions. Its comparison quietly assumes you buy the car at lease end, a different question from keeping a financed car, and its money factor handling is buried in a parameter string few readers will audit.
- ProCarManuals’ lease vs buy tool: a genuine same-window comparison with equity credited, residual as a percentage, and mileage overage named. It forces one shared term, which is honest, but then cannot model the real-world pairing most shoppers actually face: a 60-month loan quote against a 36-month lease quote.
- FinExplained’s buy vs lease tool: the strongest methodology in the set, with a shared horizon and the remaining loan balance netted out of the buyer’s equity. That balance step is more correct than crediting the full end value; this page credits the value you enter, which is why the horizon section above insists you enter the value for the date your comparison actually ends.
- Ultimate Finance Calculator and the payment-entry tools: several rivals skip building the lease payment entirely and ask you to type in a quoted monthly lease payment, so the money factor, the residual and the depreciation split are never tested at all.
- The gap this page fills: both payments built from one price, the lease payment split into its two charges, the rate accepted in either form and translated in the open (with the double-count fix documented), a verdict on net cost, and the horizon and end-value sensitivities printed next to the verdict instead of in a footnote.
Frequently asked questions
On net cost, buying usually wins for drivers who keep the car, because the loan ends with equity and the lease ends with nothing. In this calculator’s worked example the lease wins by $488.77, but only because the comparison runs a 60-month loan against a 36-month lease and credits the buyer with a $20,000 value at the end: shorten the loan to the same 36 months and the loan wins by $1,217.53. Read the verdict together with the terms you entered, not as a universal answer.
Multiply the money factor by 2,400. A money factor of 0.00208 is about 4.99% APR, and 0.002 is exactly 4.80% APR. This calculator accepts either form: enter a value of 1 or less and it is read as a money factor; enter a value above 1 and it is read as an APR percentage and converted with the same 2,400 rule. The note under the field shows the translation as you type.
Judge it through its APR equivalent. A money factor near current auto loan rates (an APR equivalent in the mid single digits) is fair for a well-qualified lessee; a factor of 0.003, which is 7.20% APR, is expensive next to a 5% loan. Dealers can mark the factor up, so ask for it in writing and compare it with the loan APRs you qualify for.
The lease residual is the leasing company’s forecast of the car’s value at lease end; it sets the depreciation you pay for. The separate vehicle value at end of comparison field is your estimate of what the car will be worth if you buy it, and it is credited back as your equity. They come from different documents, the lease contract versus your own market estimate, so the tool keeps them separate. Leave the buying value blank and the tool uses the lease residual for both.
A lease payment only covers the value the car loses during the term, plus a finance charge: in the worked example that is $333.33 of depreciation plus $104.00 of finance charge, $437.33 a month. A loan payment retires the whole financed amount, $603.88 a month in the same example. Lower does not mean cheaper; the verdict compares total net cost after equity, not the monthly figure.
Acquisition and disposition fees, excess mileage and wear charges, early termination costs, insurance differences, maintenance after the warranty, and taxes on lease payments: the sales tax field here is applied once to the vehicle price, the purchase pattern, while many states tax lease payments monthly instead. It also compares the full loan term against the full lease term even when they differ in length. Use it to compare two real quotes on the same car, then check the contract disclosures for the charges it cannot see.
It lowers the monthly payment by shrinking the capitalized cost, but it barely changes the total cost, and cash put down on a lease is normally lost if the car is stolen or totaled early in the term, because you never owned equity in it. The same cash on a loan builds equity from day one. Many advisors keep lease down payments small for exactly that reason.
Whatever your contract allows, commonly 10,000 to 15,000 miles a year, with excess miles charged at turn-in, often $0.15 to $0.30 a mile. In this calculator the miles field changes only the lease cost-per-mile line; it does not price overage charges, because the tool does not know how many miles you will actually drive. High-mileage drivers are the classic case where buying wins.
Yes. The selling price (which becomes the capitalized cost), the money factor and most dealer fees are negotiable, and federal Regulation M disclosures require the lessor to itemize the capitalized cost, residual value, depreciation and rent charge before you sign. Only the residual percentage is usually set by the leasing company and not open to negotiation.
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References
- Consumer Financial Protection Bureau. Regulation M, Section 1013.4: Content of Disclosures. Accessed October 22, 2026.
- Board of Governors of the Federal Reserve System. Regulation M, Section 1013.4: Content of Disclosures (payment calculation progression). Accessed October 22, 2026.
- Board of Governors of the Federal Reserve System. Background and Summary of Regulation M (Consumer Leasing Act). Accessed October 22, 2026.
- Cornell Law Institute, Legal Information Institute. 12 CFR 1013.3: General Disclosure Requirements. Accessed October 22, 2026.
- Federal Trade Commission. FTC Puts Brakes on Deceptive Vehicle Lease and Credit Ads (consumer leasing education). Accessed October 22, 2026.
- Experian. How Much Does It Cost to Lease a Car? (State of the Automotive Finance Market data). Accessed October 22, 2026.
- Experian, via Business Wire. State of the Automotive Finance Market Report: Q2 2026. Accessed October 22, 2026.
- Federal Register. Consumer Leasing Act and Regulation M: Disclosure Requirements for Consumer Lease Transactions. Accessed October 22, 2026.
- Board of Governors of the Federal Reserve System, via FRASER. Regulation on Consumer Lease Disclosures (Regulation M), Press Release, September 27, 1996. Accessed October 22, 2026.
- Board of Governors of the Federal Reserve System. CFPB Official Staff Commentary on Regulation M (capitalized cost and residual value). Accessed October 22, 2026.