Lease or buy the same car.

By The Broker Black · Updated September 30, 2026

Leasing looks cheaper month to month because you only pay for the part of the car you use. Buying costs more each month but leaves you with a car. The fair comparison is what each one really costs you over the same stretch of time, after you count what you own at the end. The calculator below does exactly that.

Lease or buy, on your numbers.

Type your own numbers and see the same car priced as cash, as a loan, and as a lease, with the taxes and state fees for Arizona. Nothing you type leaves this page.

Where you register the car

The car Price you agreed on$The selling price, before tax and fees. Sticker price (MSRP)$A lease figures its residual from the sticker. Rebates and incentives$

Your trade and money down Trade-in value$ Still owed on the trade$ Cash down$

Credit and loan Your credit score Loan APR%Starts at the average for your score. Change it to a rate you have. Loan term

Lease Lease term Residual%What the car is expected to be worth at the end, as a share of the sticker. Money factorAbout ... as an APR (money factor times 2,400). Acquisition fee$The leasing company's fee, usually rolled into the lease. Change it to yours.

Taxes and fees Sales tax rate%Worked out for Arizona on this price, after any trade-in credit (some places tax less above a set amount). Change it if yours differs. Title, registration, and state fees$An estimate for a new car at this price. Change it if you know yours. Dealership documentary fee$Type your dealership's own fee; it varies by store.

Cash

...

out the door

Sales tax: ...
Title, registration, and fees: ...
Trade-in: ...
Due at the dealership: ...

Finance

.../mo

Amount financed: ...
Total interest: ...
Payments plus cash down: ...

Lease

.../mo

Due at signing: ...
Total over the lease: ...
Value at lease end: ...

Lease or buy, over 36 months

	You pay	You own at the end	Real cost
Lease	...	Nothing; you hand it back	...
Finance	...	Equity of ...	...
Cash	...	A car worth about ...	...

An estimate on the numbers you type, not an offer of credit or a quote from any dealership. Starting loan rates are the average new-car APR for each credit tier (used-car APR for a used car) from Experian's State of the Automotive Finance Market, second quarter 2026, VantageScore 4.0. The starting money factor, residual, and acquisition fee are starting figures only; the leasing company sets the real ones. Taxes and state fees are estimates for Arizona; the dealership's paperwork and your motor vehicle agency have the final numbers. What you own at the end assumes the car is worth the residual. Nothing you type is sent, saved, or used to check your credit.

The calculator needs JavaScript. How it works: a loan payment is the amount financed times the monthly rate, divided by one minus (one plus the monthly rate) to the power of minus the term. A lease payment is the depreciation (net capitalized cost minus residual, divided by the term) plus the rent charge (net capitalized cost plus residual, times the money factor), plus tax the way the state taxes a lease.

How to read the result.

The table under the calculator follows each way of paying for the length of the lease. You pay is everything out of your pocket in that time: cash down, the payments, and what is due at signing. You own at the end is what the car is worth then, minus anything still owed on a loan. Real cost is the first minus the second.

A lease ends with nothing to own, so its real cost is everything you paid. A loan ends with a car worth more than the balance you still owe, and that equity comes off. The car's value at the end is the residual you typed, which is the same figure the leasing company bets on.

When leasing tends to win.

You like a new car every two or three years. Leasing skips the trade-in and resale steps, and the car is usually under the factory warranty the whole time.
The residual is strong or the money factor is low. Manufacturers often support a lease on a model they want to move, which can make the lease cheaper than the loan on the same car.
Your state taxes a lease one payment at a time. You pay tax only on the part of the car you use, instead of the whole price up front.
You drive a predictable number of miles. Staying inside the mileage allowance keeps the end of the lease simple.

When buying tends to win.

You keep a car well past the loan. Every month without a payment is where owning pulls ahead.
You drive a lot. Excess mileage charges on a lease add up quickly.
You want to modify the car, or you are hard on it. A lease expects the car back in normal condition.
Your state taxes a lease up front on the whole price. The tax advantage of leasing shrinks when the lease is taxed like a purchase.

Pros and cons at a glance.

	Lease	Buy
Monthly payment	Usually lower	Usually higher
Due at signing	First payment, fees, and any cash down	Cash down, tax, and fees, unless they are financed
At the end	Hand it back, buy it, or lease another	The car is yours
Miles	An allowance, with a charge per mile over	No limit
Wear and changes	Normal wear only; changes usually undone	Your call
Sales tax	Depends on the state (see below)	On the price, after any trade-in credit your state allows

How each state taxes a lease.

How a lease is taxed decides how much of leasing's tax advantage you keep. The calculator applies the rule for the state you pick.

How the lease is taxed	States
On each payment	Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Hawaii, Idaho, Indiana, Kansas, Kentucky, Louisiana, Massachusetts, Michigan, Mississippi, Missouri, Nebraska, Nevada, North Carolina, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Washington, West Virginia, Wisconsin, Wyoming
On all payments, at signing	Georgia, Illinois, Iowa, Maine, Minnesota, New Jersey, New York, North Dakota, Ohio, Vermont
On the price, carried in the lease	Delaware, District of Columbia, Maryland, New Mexico, Oklahoma, Oregon, South Carolina, Texas, Virginia
No lease tax	Alaska, Montana, New Hampshire

Questions.

Is it better to lease or buy a car?

It depends on how long you keep cars and how much you drive. Over the length of a lease, a well-supported lease can cost less than financing the same car, but a car you keep for years after the loan is paid off usually costs less overall. Run both on the same car above to see which wins on your numbers.

When should you lease instead of buy?

Leasing makes the most sense when you want a new car every few years, drive a predictable number of miles, and the manufacturer is supporting the lease with a strong residual or a low money factor. Buying makes more sense when you keep cars a long time, drive a lot, or want to change the car.

Can I buy my car at the end of the lease?

Usually, yes. Most leases include a purchase option at the residual value written in the contract, plus any purchase-option fee. If the car is worth more than the residual when the lease ends, buying it at the residual keeps that difference for you.

Does leasing save on sales tax?

In most states, yes, because the tax is charged on each payment rather than on the whole price. In some states the tax on all the payments is due at signing, and in a few the whole price is taxed when the leased car is titled, which removes most of the difference. The table above shows how each state does it.

Is leasing or buying better for a business?

If you use the car for business, the IRS lets you deduct the business share of lease payments, or depreciation and interest on a car you own, under different rules and limits (IRS Publication 463). Which comes out ahead depends on the car and how you use it, so ask your tax adviser before you decide.

Sources.

Browse new cars Taxes and fees by state