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Lease vs. Buy Worksheet
$9.99The same car both ways over the same term, using this site's own lease definitions — depreciation base, the rent charge computed on capitalized cost PLUS residual, and the money-factor-to-APR conversion that turns a quoted 0.00300 back into the 7.2% it actually is. Prices the excess-mileage bill from the miles you really drive rather than the allowance you were sold. Then the line that decides it and is nearly always left out: what the car is still worth when a loan ends and a lease does not, which is why leasing so often looks cheaper than it is.
Format: Excel (.xlsx)
Look inside
Preview only — scroll to read it. The file you download is fully editable.
| Lease vs. Buy Worksheet | |||
| The two are not comparable on monthly payment, because at the end of one you own a car and at the end of the other you own nothing. This compares the cost of the same term both ways, and then the part everyone leaves out: what the car is still worth when the loan ends. | |||
| Part 1 — Shared inputs | |||
| Negotiated vehicle price | 38000 | NEGOTIATE THIS ON A LEASE TOO. The price is the capitalized cost, and a salesperson who says the price is fixed on a lease is wrong. | |
| Term (months) | 36 | Compare like with like. A 36-month lease against a 72-month loan is not a comparison. | |
| State sales tax rate (%) | 5.75 | ||
| Cash down / cap cost reduction | 0 | On a lease this is at risk: total the car in month two and it is gone. That is a real argument for putting little or nothing down on a lease. | |
| Trade-in allowance | 0 | ||
| Rebate applied | 0 | ||
| Miles you actually drive per year | 15000 | Be honest. Look at your last two years of service records rather than guessing — the guess is always low. | |
| Part 2 — The lease | |||
| Residual value at lease end | 22800 | Set by the leasing company, not negotiated, and the single largest driver of the payment. A high residual is what makes a lease cheap. | |
| Money factor | 0.0025 | NOT an APR. Multiply by 2400 for the rough APR equivalent — the row below does it. A dealer quoting 0.00300 is quoting 7.2%. | |
| Equivalent APR (%) | ƒx | Money factor x 2400. Compare this against the loan rate in Part 3 — they are frequently not the same, and the lease one is rarely the lower. | |
| Acquisition / bank fee | 695 | Usually capitalized into the payment rather than paid up front. | |
| Disposition fee at the end | 395 | Charged when you hand the car back. Often waived if you lease again from the same brand — which is the point of it. | |
| Mileage allowance per year | 12000 | ||
| Excess mileage charge per mile | 0.25 | Commonly 15-25 cents. On 5,000 extra miles a year over three years that is a four-figure bill at the end. | |
| Net capitalized cost | ƒx | Price plus the acquisition fee, less everything you put in. | |
| Depreciation you pay for | ƒx | The lease charges you for the value the car loses while you have it. That is the whole idea of a lease. | |
| Monthly depreciation | ƒx | ||
| Monthly rent charge | ƒx | The interest equivalent. Note it is charged on cap cost PLUS residual, not on a declining balance — which is why a lease is not cheap money. | |
| Monthly payment before tax | ƒx | ||
| Monthly payment with tax | ƒx | Most states tax a lease on the payment stream. A few charge the full vehicle tax up front instead — check yours, because it changes the cash needed at signing enormously. | |
| Projected excess miles over the term | ƒx | ||
| Excess mileage bill at the end | ƒx | ||
| TOTAL COST OF LEASING | ƒx | Cash down, every payment, the disposition fee and the mileage bill. At the end of this you own nothing. | |
| Part 3 — Buying | |||
| Sales tax on the purchase | 2185 | From the Out-the-Door Price Worksheet, which works your state's trade-in rule. Do not guess it here. | |
| Fees on the purchase | 500 | Doc fee, title, registration — again from the out-the-door worksheet. | |
| Interest rate (%) | 6.9 | From a pre-approval, not from the desk. | |
| Amount financed | ƒx | ||
| Monthly payment | ƒx | ||
| Total of payments | ƒx | ||
| Total interest | ƒx | ||
| Cash out over the term | ƒx | ||
| Part 4 — The part everyone leaves out | |||
| At the end of a lease you hand the car back. At the end of a loan you own it, and what it is then worth is a real asset that belongs in the comparison. Leave it out and leasing always looks cheaper, which is why it usually is left out. | |||
| What the car is worth at the end of the term | 22800 | Yellow because it is an estimate. A fair starting point is the lease's own residual in row 14 — the leasing company's paid guess at the same number. Try a value 20% lower too and see whether the answer changes. | |
| TRUE COST OF BUYING | ƒx | Everything you paid, less what you still have. This is the figure to compare against the lease total. | |
| TRUE COST OF LEASING | ƒx | ||
| Difference (leasing - buying) | ƒx | ||
| Verdict | ƒx | ||
| Part 5 — What the arithmetic does not decide | |||
| A lease is a rental with a mileage limit and a condition standard. Buying is ownership with a maintenance bill and a resale problem. The cost comparison above is real, and it is not the whole decision. | |||
| Do I drive more than the allowance? | |||
| Excess mileage is charged per mile at the end and it is not negotiable then. Row 29 prices yours. | |||
| Do I keep cars a long time? |
Preview shows the first 60 rows. The full worksheet continues for 19 more — the complete worksheet is in the download.
This template is general information, not financial, legal, or tax advice.