Buy vs Lease Car Calculator
Donald pays cash, Frank finances, Nancy rolls leases: identical income, savings and hold period. Each invests whatever is left after car costs. Ending net worth = portfolio + car equity.
| Data | Series | Provider |
|---|---|---|
| Federal EV credit | Clean-vehicle credit rules and the September 30, 2025 end date | IRS |
Federal new, used and commercial clean-vehicle credits ended for vehicles acquired after September 30, 2025, so no federal EV credit is modeled. Reflect any dealer discount in your actual price or lease quote.
| Year | Donald net worth | Frank net worth | Nancy net worth | Donald spent | Frank spent | Nancy spent |
|---|
About this tool
Compare buying and leasing a car on final net worth rather than monthly payment: the model handles depreciation, financing, insurance, the federal EV credit, and for business owners the Section 179 deduction, then finds the break-even year where buying overtakes leasing.
A car is a depreciating asset, so the real cost of either path is depreciation plus financing plus running costs. Leasing packages that cost into a payment and hands the car back; buying pays it up front and keeps the residual. Which wins depends mostly on how long you keep cars and how you use taxes.
Is leasing ever cheaper than buying?
It can be for short ownership periods, for business use with deductible payments, or when manufacturer lease subsidies are rich. Held past the break-even year the tool computes, buying nearly always wins.
What is the Section 179 deduction?
A US tax provision letting business owners deduct qualifying vehicle costs up front rather than depreciating them over years. Heavier vehicles have historically enjoyed the most generous limits, hence the famous SUV loophole.
How does the federal EV credit work?
Federal new, used and commercial clean-vehicle credits are unavailable for acquisitions after September 30, 2025. This tool models current prospective acquisitions with zero federal EV credit; use your actual dealer quote for discretionary discounts.