Which is better, Lease or Buy Car?

It depends on your tax bracket, time horizon, and risk tolerance. Use the side-by-side calculator on this page to see which wins for your specific numbers.

How does this Lease vs Buy Car calculator work?

Enter your inputs (amount, rate, horizon) and the calculator computes the after-tax, inflation-adjusted outcome for both options side-by-side. Free, no signup.

Is this analysis US-specific?

Yes. All defaults are based on 2026 US tax brackets, IRS contribution limits, and Social Security wage base. Currency is USD with CAD/GBP/EUR/AUD optional.

Lease vs Buy

Lease vs Buy a Car — Which Costs Less Long-Term?

Leasing minimizes monthly payment. Buying minimizes lifetime cost. The right answer depends on how long you keep cars and your annual mileage.

Verdict

Buy if you keep cars 7+ years and drive <15K miles/year. Lease only if you must have a new vehicle every 3 years for business reasons, or if you genuinely can't afford the buy payment. The "lease forever" path costs about $300K more over 30 years than buy-and-hold.

Side-by-side comparison

	Lease	Buy
Monthly payment (3yr $40K)	~$400	~$650
Mileage cap	10-15K/yr typical	None
At end of 3 years	Return car, lease again	Own car worth ~$22K
Cumulative 9-year cost	~$45K (3 leases)	~$45K + own ~$15K residual
Best for	Heavy business write-off, 36mo turnover	Long-term holders, low annual miles

Who should pick Lease

Business owners writing off 100% of business use. People who want a new car every 3 years and don’t want to deal with selling. Anyone whose employer covers leased vehicles.

Who should pick Buy

Anyone who keeps a car 5+ years. Drivers over 15K miles/year. Anyone who wants to be debt-free in 5-7 years. Buy-and-hold investors who hate recurring payments.

Disclaimer. Comparison numbers depend on your tax bracket, state, and time horizon. Educational only — not personalized financial advice. See our Financial Disclaimer.

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