Lease vs Buy Car Calculator

Leasing typically has lower monthly payments (you only pay for the depreciation during the lease term), but you build no equity and always have a payment. Buying costs more monthly but you eventually own the car outright. Over a 10+ year horizon, buying almost always costs less total. Leasing makes sense if you value always driving a new car, low maintenance costs, and tax deductibility for business use.

The acquisition fee (also called bank fee or administrative fee) is a flat fee charged by the leasing company to set up the lease, typically $595–$1,095. It is usually added to the total capitalized cost and paid upfront or rolled into the lease. Unlike a dealer fee, it goes to the manufacturer's financial arm (e.g., BMW Financial, Toyota Financial) and is generally non-negotiable.

You will be charged the overage rate (typically $0.15–0.30 per mile) for every mile over the annual allowance. On a 36-month lease with 12,000 miles/year, if you drive 15,000 miles/year: you are over by 9,000 miles total. At $0.25/mile that is $2,250 due at lease end. Always negotiate a higher mileage allowance upfront if you drive more than average — it is cheaper than paying overage fees.

Lease if: you want a new car every 2–3 years, you drive predictable mileage, the car qualifies for a business deduction, or you dislike maintenance surprises. Buy if: you plan to keep the car 5+ years, you drive high mileage, you want to build equity, or you modify your vehicles. Most financial advisors recommend buying for long-term savings, but leasing can make sense in specific situations.