Disclaimer: This site is an independent editorial resource providing general information and estimates about new-car buy vs. lease financial decisions. It is not financial, tax, or legal advice. Tax treatment of business vehicle expenses, EV credits, and loan-interest deductions under the One Big Beautiful Bill Act (OBBBA) varies by individual circumstance - consult a licensed tax professional before relying on any figures for a filing decision. Calculator outputs are estimates based on the inputs provided and current market conventions; actual dealer quotes, APRs, money factors, residuals, and residual buyout prices may vary. This site is not affiliated with any manufacturer, captive finance arm, bank, insurance company, or extended warranty provider. All trademarks are property of their respective owners. Tax rules, APR tiers, and lease terms change frequently. Data verified April 2026. Confirm specifics with your lender, dealer, or CPA.

Break-Even Calculator / April 2026

Full Break-Even Calculator: Buy vs Lease a Car

Adjust any input. The break-even year and cashflow update live.

MF x 2,400 = APR equivalent (4.2%)

BUY WINS THROUGHOUT

Over your chosen horizon, buying is ahead in net cost.

Yr1Yr3Yr5Yr7Yr9Yr10
Buy (net) Lease (cumulative)
YearCum. LeaseCum. BuyBuy EquityBuy Net
1$10,910$11,792$1,405$10,387
2$17,925$20,583$3,472$17,111
3$24,940$29,375$8,116$21,259
4$33,245$38,167$13,565$24,602
5$40,260$46,959$19,829$27,130
6$47,275$46,959$18,441$28,518
7$55,580$46,959$17,150$29,809
Based on these inputs, BUYING is ahead over your 7-year horizon.

How to read this output

Break-even year chip. The large number at the top of the output panel is the year at which cumulative buy cost (after subtracting equity) first drops below cumulative lease cost. Before that year, leasing is cheaper. After it, buying is cheaper. If the chip reads “BUY WINS THROUGHOUT” over your horizon, buying is cheaper for every year you entered.

Cashflow table. Each row shows one year of the ownership horizon. “Cum. Lease” is the running total of all lease payments plus fees paid to date. “Cum. Buy” is the running total of all loan payments. “Buy Equity” is the car’s estimated current market value minus the remaining loan balance. “Buy Net” is Cum. Buy minus Buy Equity - this is the true cost of buying if you sold today. When Buy Net drops below Cum. Lease, buying has won.

Equity curve. The oxblood line (buy net cost) and steel-teal line (lease cumulative cost) cross at the break-even year. Before the crossing, teal is lower (lease cheaper). After the crossing, oxblood is lower (buy cheaper). The crossing point is the break-even.

What the inputs mean

InputMeaning
Vehicle PriceMSRP or negotiated selling price before incentives and trade-in.
Down PaymentCash paid at lease or loan signing. Reduces cap cost on lease, reduces principal on buy.
Trade-inValue of your current vehicle credited at signing. Treated as additional cap cost reduction.
APRAnnual percentage rate on the auto loan. Use the chip for your credit tier or enter a custom rate.
Loan TermLength of the financing in months. Longer terms lower monthly payment but increase total interest.
Money FactorLease financing rate. Multiply by 2,400 to get APR equivalent. 0.00175 = 4.2% equivalent.
Residual %Percentage of MSRP the car is projected to be worth at lease-end. Higher = lower payment.
Lease TermLength of the lease in months, typically 24, 36, or 39 months.
Acquisition FeeBank fee charged by the captive at lease signing, typically $595 to $1,095.
Disposition FeeFee charged by captive at lease return if you do not re-lease or buy out, typically $300 to $500.
Annual MileageHow many miles you drive per year. Affects depreciation and mileage overage math.
Sales Tax %Your state/local sales tax rate applied to monthly lease payment.
Horizon (years)How many years you plan to own or cycle cars. The calculator models this many years.

Calculator FAQ

Why does the break-even year change when I adjust money factor?⌄
Money factor is the financing rate for a lease, equivalent to APR when multiplied by 2,400. A lower money factor reduces the rent charge component of the monthly payment, making leasing cheaper and pushing the break-even year later - it takes longer for buying to overtake a cheaper lease. A higher money factor increases monthly lease cost and pulls the break-even year earlier.
What is a realistic money factor in 2026?⌄
For prime credit buyers in April 2026, captive buy-rate money factors typically range from 0.00100 (2.4% APR equivalent, a loyalty or subvented deal) to 0.00250 (6.0% APR equivalent, a near-prime rate). Dealer markup can add 0.00050 to 0.00100 on top. Always ask the dealer for the buy-rate money factor and compare to any data you can find for that specific model and captive.
How accurate is the depreciation curve?⌄
The calculator uses a simplified standard curve: 20% depreciation in year 1, 15% in year 2, 10% in years 3 through 5, and 7% per year thereafter, with a floor at 20% of MSRP. Real depreciation varies considerably by make, model, mileage, condition, and market conditions. Trucks and SUVs with strong resale (Toyota Tacoma, 4Runner) hold value better. EVs have been more volatile. Use the curve as an estimate, not a precise forecast.
Does the calculator include sales tax?⌄
The calculator applies the sales tax rate to the monthly lease payment, which is how most states structure lease taxation (tax on the monthly payment amount rather than on the full vehicle price). For purchased vehicles, most states tax the full cap cost at signing. The calculator applies the entered rate to the lease payment only; for purchase, the down payment includes upfront sales tax implicitly. Adjust your down payment figure to reflect actual out-of-pocket if your state taxes the full purchase price upfront.
Can I save my calculation?⌄
The calculator does not store calculations server-side. To save your result, take a screenshot of the output panel showing the break-even year, the cashflow table, and your input values. You can also note the URL and your inputs manually. A share or copy feature may be added in a future update.
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