Lease vs. Buy Calculator: Make the Right Move

Analyze the true cost of ownership versus the flexibility of a lease.

Deciding between leasing and buying is a major financial milestone for any family or business. While leasing offers lower monthly payments and the latest technology, buying builds equity and eliminates mileage restrictions. Our calculator provides a side-by-side comparison of the total cost of each option over time, including depreciation, taxes, and resale value.

The Key Differences Explained

On familyhealthcalc.com, we break down the financial mechanics that differ between the two paths:

1. The Buying Path (Financing)

When you buy, you are paying for the entire value of the vehicle.

• Pros: You own the asset, there are no mileage limits, and you can sell it at any time.
• Cons: Higher monthly payments and the risk of "negative equity" if the vehicle depreciates faster than you pay off the loan.

2. The Leasing Path

When you lease, you are only paying for the depreciation that occurs during the term.

• Pros: Lower monthly payments, usually covered by a factory warranty, and you can easily upgrade to a new model every 3 years.
• Cons: You have no equity at the end, and you may face "Excess Wear and Tear" or mileage overage fees.

Hidden Costs to Consider

• Mileage Penalties: Most leases in the US and Canada limit you to 10,000 or 12,000 miles per year. Exceeding this can cost $0.20 to $0.30 per mile.
• GAP Insurance: Many leases include GAP insurance (which covers the difference between what you owe and what the car is worth if totaled), whereas buyers often have to purchase this separately.
• Opportunity Cost: Because leasing has lower monthly payments, the money you "save" each month could be invested. Our calculator factors in this potential investment growth to show a fair comparison.