Car Loan vs. Lease Comparison Calculator
Compare the numbers side by side for financing versus leasing the same vehicle. This shows raw cost totals only — it doesn't account for factors like mileage limits, ownership at the end, or resale value, which matter too.
Two different formulas on one price
The same vehicle price feeds both sides. The loan side amortises what is left after your deposit; the lease side charges depreciation plus a rent fee:
loan payment = (price - down) x r x (1+r)^n / ((1+r)^n - 1), r = APR/1200
lease payment = (price - residual) / term + (price + residual) x money factorOn the defaults, financing $27,000 at 6% over 60 months is $521.99 a month and $34,319 in total. The lease is $333.33 of depreciation plus $60.00 of rent fee - $393.33 a month, $14,160 over 36 months.
The totals are not a verdict
$34,319 against $14,160 compares five years of buying with three years of renting, and one of them ends with a car. Put the loan on the lease's clock instead. After 36 payments you have paid $21,792 including the deposit and still owe about $11,780. If the car is then worth the $18,000 residual, your equity is $6,220, so three years of ownership cost roughly $15,570 - about $1,410 more than the lease, with the car and its remaining value still yours.
Frequently asked questions
Why is a lease payment so much lower than a loan payment?
You are only paying for the value the car loses. Over 36 months that is $12,000 of the $30,000 car, not the whole thing, plus rent on the money the bank has tied up.
Is it cheaper to lease or to buy a car?
Over one short term the lease usually wins on cash out, by around $1,410 on these numbers. Buying wins as soon as you keep the car past the loan, because the payments stop and the depreciation slows.
How do I compare a 36-month lease with a 60-month loan fairly?
Value the car at the point the lease ends. Add up what you have paid on the loan by then, subtract the resale value less the outstanding balance, and compare that with the lease total.