Own vs. Lease Calculator
Should you buy or lease your next car? Compare the true financial impact over time, factoring in depreciation, loan costs, maintenance, insurance, and investment opportunity cost.
🚗 Owning
📄 Leasing
| Owning | Leasing | |
|---|---|---|
| Total Cash Spent | $0 | $0 |
| Vehicle Residual Value | $0 | $0 |
| Mileage Overage Fees | $0 | $0 |
| Investment Portfolio | $0 | $0 |
| Net Financial Position | $0 | $0 |
| Net position = residual value + investment portfolio − total cash spent. Buyer keeps car; lessee returns it. | ||
- Time horizon is everything: Owning wins over longer periods because the car is paid off but still usable. Leasing wins for shorter periods and guarantees a newer car
- Depreciation is the biggest cost: New cars lose ~20% in year 1 and ~50% by year 5. This is the hidden cost of ownership that many buyers overlook
- Maintenance escalation matters: Once the warranty expires, maintenance costs can double. Leasing always keeps you under warranty
- Watch the mileage: Overage charges of $0.15-$0.30/mile add up fast. If you drive 15K+ miles/year, leasing becomes significantly more expensive
- Opportunity cost is real: A larger down payment for buying could be invested. The difference in monthly costs between owning and leasing also has investment potential
- Insurance costs differ: Leased vehicles typically require higher coverage limits, adding $20-50/month vs an owned car
- Sales tax treatment varies: Some states tax the full purchase price when buying but only monthly payments when leasing, which can be a significant advantage for leasing
How We Calculate Own vs. Lease
This calculator performs a month-by-month financial simulation comparing the total cost and net financial position of buying versus leasing a vehicle over your chosen time horizon.
For owning, we calculate the full auto loan amortization to determine monthly payments and interest. The vehicle depreciates on a standard curve: ~20% in year 1, ~15% in year 2, ~10% in year 3, then ~7-8% per year after that. After the loan is paid off, you still own a depreciating asset but have no monthly payment, freeing up cash to invest.
For leasing, we model the full lease term including due-at-signing costs, monthly payments with sales tax, and a disposition fee at turn-in. When the time horizon exceeds the lease term, we assume continuous re-leasing with payments inflated at the specified rate. Each new lease incurs fresh due-at-signing costs. Mileage overage fees are calculated if you drive more than the allowance.
Depreciation Curve
We use a standard auto depreciation schedule based on industry data:
- Year 1: 20% depreciation (car is worth 80% of MSRP)
- Year 2: 15% depreciation (car is worth 68%)
- Year 3: 10% depreciation (car is worth 61%)
- Year 4+: 8% depreciation per year
You can override this with a custom residual value in Pro Mode if you know your vehicle's expected value.
Opportunity Cost
Both scenarios track an investment portfolio. The buyer's portfolio starts smaller (cash not used for down payment/tax is invested). Each month, any difference in cash outflows between the two options is reflected. Whoever spends less adds to their portfolio. This ensures the comparison accounts for what your money could earn elsewhere.
Disclaimer: This calculator is for educational purposes only. Actual vehicle depreciation, maintenance costs, and investment returns vary widely. Results are estimates based on your inputs and assumptions. This is not financial advice. Consult a financial professional before making vehicle purchasing decisions.
Track Your Vehicle Costs & Net Worth with SavePoint
Monitor your auto loan payoff, track vehicle value, and see your complete financial picture in one privacy-focused app.
Get SavePoint - One-Time Purchase