Buying vs. Leasing - Auto Calculator

Alerts and notices

You can use this calculator to compare the cost of buying versus leasing an automobile.


  • Since the option to buy provides equity in the auto, this amount is subtracted from total costs to arrive at the amount in the Net cost field.
  • The calculator determines the Ending market value field by multiplying the amount in the Residual percent field by the amount in the Purchase price field.
  • The Lost interest on payments field displays the interest that could have been earned if the money spent on the auto had been invested instead.


Field Input
Purchase price $20,000
Sales tax rate 7%
Residual percentage 60%
Buying Leasing
Down payment $1,000 $1,000
Term of loan or lease in months 60 24
Annual interest rate 8%
Monthly payment $424.35
Annual rate of return 8% 8%

In this example, leasing would cost more than buying over the 24 month period used in this comparison. The difference between the two options is $1,947.47.


  • The annual interest rate is the interest rate on the loan used to purchase the automobile.
  • The annual rate of return is the rate of return expected on invested funds.
  • The residual percentage equals the value of the car at the end of the lease period.

Copying and pasting loan payment schedules into Excel or other applications

View this procedure to learn how to copy loan payment schedules into Excel or other applications.

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