Lease Break Even Calculator
Find the holding period at which buying becomes cheaper than leasing, and see how mileage, resale value and rates move the crossover point.
Last reviewed by the Radiatus Cloud team
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The crossover point
Leasing and buying have different cost shapes. Leasing is close to linear: roughly the same amount every month, forever. Buying is front-loaded through depreciation and financing, then drops sharply once the asset is paid off and you are only covering maintenance. Somewhere the cumulative lines cross, and after that point buying is cheaper for every additional month you keep the asset.
What moves the crossover
Resale value matters most. An asset holding its value well shortens the payback on buying considerably, because depreciation is the real cost of ownership. Financing rate matters next: cheap credit brings the crossover forward, expensive credit pushes it back. Usage matters in both directions, since heavy use accelerates depreciation but also triggers lease excess charges, which are typically punitive.
Excess mileage and wear
These are where lease comparisons quietly fail. Per-mile excess charges are set well above the marginal depreciation they represent, and return inspections assess wear against a standard that is stricter than most people expect. A lease that looked competitive can end with a four-figure settlement. If your usage is uncertain, that uncertainty is itself an argument for buying, because ownership has no cliff-edge penalty for using the asset more.
Include maintenance honestly
A lease usually covers the asset during its most reliable years and hands it back before major maintenance falls due. Ownership past the warranty period carries real and lumpy costs. Comparing a three-year lease against ten years of ownership without budgeting maintenance in years four to ten flatters buying substantially.
The answer is usually about horizon certainty
If you know you will keep the asset well past the crossover, buying wins clearly. If you genuinely do not know, the flexibility of leasing has value that the arithmetic does not capture. Being honest about which situation you are in matters more than the precision of the calculation.
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Frequently Asked Questions
When does buying become cheaper than leasing?
At the point cumulative ownership cost falls below cumulative lease payments, which is typically once the asset is paid off and you are only covering maintenance. Beyond that, every additional month of ownership widens the gap.
What most affects the crossover point?
Resale value, since depreciation is the real cost of owning. An asset holding value well shortens the payback considerably. Financing rate comes next, with cheap credit bringing the crossover forward.
How do excess mileage charges affect the comparison?
Substantially. Per-mile charges are set well above the depreciation they represent, and return inspections apply a stricter wear standard than most expect. A competitive-looking lease can end with a four-figure settlement.
Am I comparing maintenance fairly?
Often not. A lease covers the asset during its most reliable years and returns it before major maintenance falls due. Comparing a three-year lease with ten years of ownership without budgeting later maintenance flatters buying.
What if I do not know how long I will keep it?
That uncertainty favours leasing, whose value lies in flexibility rather than cost. If you are confident of keeping the asset well past the crossover, buying wins clearly.
Privacy & Security
Runs entirely in your browser. Lease and purchase inputs are not uploaded.
How to Use
Enter purchase price, upfront costs, expected resale value, monthly ownership cost, lease monthly payment, lease upfront cost and comparison period to find the break-even point.
Disclaimer: This tool is provided "as is" without warranty of any kind. Results are for educational and utility purposes.
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