Entry № 13 · logged Oct 1, 2026Free, no sign-upLease vs Buy · Car Finance
Should you lease or buy? Ask the net cost, not the payment.
Walk into a dealership asking “should I lease or buy” and the finance office will show you whatever makes the most profit this month. Answer it before you go in: type the lease offer on the left, the loan on the right, and the slip posts each path’s true net cost over the lease term — seeded below with a $35,000 car, $495 a month, $2,500 due at signing, against a 6.5% loan.
The seeded verdict: $20,320 to lease, $20,274 net to buy — buying edges it by $46, a coin flip.
The dealer's desk slip, Form LVB-13. Left ledger: the lease offer, line by line. Right ledger: buying the same car with a loan, minus the equity you keep. Every keystroke re-posts the net-cost verdict below the tear line.
Net cost is what each path really costs you: the lease's drive-off plus every payment plus mileage overage, against the buyer's down payment plus loan payments minus the equity left in the car at the end. The comparison window is the lease term.
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From the ledger
The three questions that actually decide it
First: your miles. Leases are priced for 10,000 to 12,000 miles a year, and every mile past the cap costs $0.15 to $0.30. Drive 15,000 a year against a 12,000 cap and the overage alone posts $2,250 over 36 months — that single line flips the seeded verdict from a $46 coin flip into a $2,296 win for buying. If you don’t know your real annual miles, check your odometer before you touch this page.
Second: how long you keep cars. Leasing is a subscription to the steepest depreciation years — you pay for the car’s value loss, then hand back whatever’s left. Buying spreads that same depreciation over as many years as you keep it. Run the same $35,000 car over a 72-month window and the buyer wins by $9,660, because the loan is long paid off while the lease would have restarted twice. The 6-years-and-up crowd should almost always buy.
Third: the deal’s quality, which is where leasing can genuinely win. A subsidized lease — high residual value, money factor near zero — is the manufacturer paying you to take the car. The seeded calculator’s break-even line says this car leases fairly at $493.72 a month; the $389-a-month deal below beats buying by $4,271. That’s not a trick of the math — it’s a real subsidy, and the slip finds it.
Disclaimer: the figures here are arithmetic, not financial advice. Resale values are guesses, money factors are negotiable, and your credit decides your rate — the dealer’s worksheet has the final word.
Filed answers
Questions from the finance office
I drive under 10,000 miles a year and like a new car every three years. Lease?
Probably, yes — that’s the lease’s home turf. Low miles dodge the overage line entirely, and if you were going to trade in every three years anyway, you’d be paying for the same steep depreciation years as a buyer without ever building the equity. Run your actual offer through the slip above to confirm the specific deal is fair.
I keep cars until they die. Lease?
No — buy. Every month past the loan payoff, the car costs you only depreciation and maintenance while a new lease would restart a full payment cycle. That’s the $9,660 gap in the 72-month window above. The lease never gets a payment-free year; the buyer gets several.
Does an EV change the answer?
It can tilt toward leasing. Battery technology moves fast enough that three-year-old EVs can depreciate harder than the residual assumed — and the lease’s guaranteed residual value is the lessor’s problem, not yours. It’s depreciation insurance you can’t buy separately. Run the slip with a conservative resale value and see where the buyer lands.
Can I negotiate a lease, or is the payment fixed?
Negotiate it — the capitalized cost (the price the lease is computed from) is as negotiable as any purchase price, and the money factor has markup in it too. The slip’s break-even payment line is your target: get the quote under it and the lease is genuinely the cheaper path.
What is a money factor, and how do I read it?
The money factor is the lease’s interest rate wearing a costume. Multiply it by 2400 to get the APR: 0.00250 means about 6.00%. Dealers quote it this way because “0.00250” doesn’t invite comparison the way “6%” does. If the worksheet shows a factor above about 0.00375 — roughly 9% — you’re financing the lease at loan-shark rates.
Is this financial advice?
No — it’s arithmetic on numbers you type. It doesn’t check your credit, negotiate your money factor, or know what your car will really be worth in three years. The dealer’s worksheet and your own budget have the final word.
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