Lease vs. Buy: The 5-Year Real Cost

Leasing and buying produce wildly different total-cost numbers for the same car, and the dealer's lease pitch almost always wins on the monthly payment alone. This calculator compares both paths on equal footing over 5 years — the typical ownership window for a buyer and 2-3 lease cycles for a lessee — so you can see the true cost of the lower monthly payment.

Plug in the agreed vehicle price (NOT MSRP — negotiate first), the lease money factor and residual the dealer offers (they should write these on the buyer's order; if they refuse, walk away), your projected annual mileage, and the finance APR you'd qualify for on a 60-month loan. We assume you'll lease the SAME car for 5 years (back-to-back leases) so the comparison is apples-to-apples on a 5-year horizon, not lease-vs-keep-forever.

Use the result to make the lease-vs-buy decision the way auto-finance editors do: leasing typically wins if you put fewer than 12,000 miles a year on the car, drive a luxury brand whose residual holds up, and value always having the latest features over equity. Buying wins for high-mileage drivers, families who keep cars 7+ years, and anyone planning to use the vehicle for rideshare or work (lessors restrict commercial use and charge punitive over-mileage fees).

This is a 5-year comparison, not a lifetime one. Buyers who keep the car for 8-10 years widen the cost gap further (no more payments after year 5, just maintenance + insurance) — that scenario is hard to show in one chart. Lease numbers also exclude excess-wear charges at lease-end, which the lessor's inspector decides and which average $300-1,200 per return. Build a 5% contingency into the lease side of the comparison if you're unsure.