When the Lease Term Matches Your Horizon Exactly

No renewal, no outstanding balance, no assumptions left standing

Every other configuration of this calculator has at least one soft edge. Either the horizon outlives the lease and a renewal has to be assumed, or the horizon lands inside the loan and a balance has to be estimated against a resale value, or both at once. This page removes all of it. The loan term, the lease term and the horizon are the same number of months, so exactly one lease is signed, one disposition fee is charged, the loan is retired on schedule, and nothing is owed on the day the comparison closes.

What is left is the comparison in its purest form, and it is worth looking at closely because the shape of the answer here is the shape most readers are actually reasoning about when they imagine this decision.

Two things are being weighed. On one side, a lease is a payment for use: you pay for the portion of the car's value you consume plus a financing charge on the rest, you hand it back, and the transaction is closed. On the other, buying is a purchase of the whole car on credit, with a large part of the money coming back at the end in the form of an asset. The buying column's payments are higher every month and its cash up front is larger, and neither of those facts settles anything, because the ending is different. The lease ends with a set of keys handed over a desk. The purchase ends with a car worth $30,000.

That is why the net cost row exists and why it is the only row that answers the question. Comparing monthly payments compares the wrong thing: it measures cash flow, not cost, and the two diverge precisely by the value of the asset. A reader who chooses on the monthly figure alone is choosing the option that is easier this month, which is a legitimate thing to want but is not the same as the option that is cheaper over four years.

The page prints both, deliberately, because both are real considerations. It just does not let the easier one masquerade as the cheaper one.

What still moves the answer when nothing is left to assume

With the terms aligned, only two levers remain that can genuinely change the verdict on this page, and it is worth knowing which they are.

The first is the car's value at the end of the horizon. It is the entire buying column's advantage, and it is an estimate rather than a fact. A car that gives back a smaller share of its price after four years narrows the gap; one that holds value better widens it. Because everything else here is contractual, this scenario isolates that single input better than any other configuration on the site — change it alone and the movement in the net cost row is attributable to nothing else.

The second is the monthly lease payment. It is the leasing column's entire ongoing cost, and unlike the resale value it is a number someone will quote you. Two quotes on the same car can differ by a meaningful amount per month, and over the horizon that difference compounds into something worth negotiating over. This is the input where an hour of shopping around converts directly into the figure on the screen.

Everything else is smaller than it looks. The disposition fee is charged once here and is modest against the totals. The cash due at signing on a lease is real money and it matters, but it is paid once rather than repeatedly, since no renewal is assumed. The APR matters to the buying column in the ordinary way, though a rate in the middle of the range does less damage over four years than over seven.

One last thing this page does not measure, and it is the reason the answer above should not be the whole decision: what happens after the horizon. A car that is paid off and kept costs almost nothing per month beyond running and maintenance, and that stretch is where ownership earns most of its long-run advantage. A comparison that stops at four years cannot see any of it. If you keep cars longer than that, extend the horizon and let the calculator show you what the extra years do.

The costs that never appear on the quote

The monthly payment is the number the dealership wants you to compare, and it is the number that leaves the most out. The costs people are surprised by later are almost all on the leasing side, and they share a family resemblance: none of them are charged while you are driving, and all of them arrive at once when you hand the car back.

Mileage is the first. A lease sets an annual allowance, and every mile beyond it carries a per-mile charge that is agreed at signing and collected at the end. The rate looks trivial written down. It stops looking trivial when it is multiplied by a few thousand miles across a three-year term, and it is charged whether or not the extra driving affected what the car is actually worth. Before you sign anything, look up how far you genuinely drove last year rather than how far you think you drive. If you are close to the limit, buying the extra miles in advance is normally cheaper than paying the overage, and if you are far above it, the real comparison is not the one on the quote.

Wear and tear is the second, and it is more subjective. Returned cars are inspected against a standard for what counts as normal, and kerbed alloys, a windscreen chip, a scuff on a bumper or a stain on a seat can each become a line item. None of these would cost you anything on a car you own, because you would simply live with them or fix them when convenient. On a lease they are converted into cash at the moment of return, alongside the disposition fee that is charged for the privilege of taking the car back at all. This calculator includes the disposition fee explicitly, once for each lease you actually complete within the horizon, so a horizon that spans two leases carries two of them.

There is one more asymmetry worth naming, which is what happens when your circumstances change. Getting out of a lease early is generally expensive and awkward, because the contract is written around a fixed term. Selling a car you own is neither: you list it, you take the price, you pay off whatever remains on the loan. Neither this nor the wear-and-tear risk is modelled in the numbers above — they cannot be, without inventing figures. They belong on the leasing side of the ledger anyway, and you should weigh them there.

The answer mostly depends on how long you keep cars

Strip away the fees and the jargon and one variable does most of the work: how long you keep a car before you replace it.

If you replace your car every three years without fail, leasing and buying converge, and leasing can genuinely come out ahead. You are paying for the steepest part of the depreciation curve either way, and the lease at least spares you the trouble and uncertainty of selling. If you keep cars for eight or ten years, buying wins and it is not close. The loan ends, the payments stop entirely, and every year after that you drive a car that costs you nothing but fuel, insurance and maintenance while a leaseholder is still writing a cheque every month, forever. Push the horizon on this page out past your loan term and you will watch that effect appear in the numbers.

So set the horizon to the truth about yourself rather than to the term of the quote in front of you. Be honest about it. Someone who has traded every car at three years is unlikely to hold the next one for a decade, and someone who drives cars into the ground should not be modelling a five-year comparison. That single input moves the verdict more than any fee discussed on this page.

And when the numbers come out close, take that seriously as an answer in itself. Two figures within a few hundred dollars of each other, built on a resale value that is a guess, are not distinguishable. At that point decide on the things the arithmetic cannot hold: whether you want to own something at the end, whether an unpredictable repair bill would be a problem, whether you drive far enough to make a mileage cap a constant irritation, and whether you would rather have a newer car more often or no payment at all in year six.