Lease vs. buy calculator for California
Got a lease quote? Put it next to a loan on the same car. This adds California's tax to each lease payment, works out the loan from the car's out-the-door price, and compares what each costs you over the lease term.
Example: leasing costs less over 36 months
By $2,744.85: leasing costs $20,982, and owning costs $23,726.85 once the car's value is counted.
| Lease: due at signing | $3,000 |
|---|---|
| Lease: 36 payments of $499.50 with tax | $17,982 |
| Cost to lease | $20,982 |
| Buy: out-the-door price | $39,486.85 |
| Buy: down payment, plus 36 loan payments of $713.91 | $28,700.76 |
| Buy: still owed on the loan after 36 months | $16,026.09 |
| Buy: minus the car's value then | −$21,000 |
| Cost to buy | $23,726.85 |
An estimate. It leaves out mileage and wear charges at lease end, insurance, yearly registration and maintenance. The out-the-door price uses the out-the-door price calculator.
How it's worked out
Leasing costs what's due at signing plus every monthly payment with tax. In California the tax is charged on each lease payment, not on the car's price [1].
Buying starts from the out-the-door price: the car, the $85 document fee, sales tax on both, and the DMV fees. Less the down payment, that's the loan. Owning costs the down payment, the loan payments made during the lease term and the balance still owed, minus what the car is worth then. The lease's residual value is used as that worth, so both sides rest on the same estimate.
The money factor is a lease's interest rate. Multiply it by 2,400 for a rough APR [2], and compare that with the rate on a loan.
Before you sign either, run the quote through the dealer fee checker, and compare prices across new cars on Brand Boulevard or cars priced below MSRP.
Questions
Is it cheaper to lease or buy a car?
It depends on the deal. Over the lease term, compare everything you'd pay to lease with what owning costs: the out-the-door price and the loan interest, minus what the car is still worth at the end. The calculator does that with your own quotes.
How is sales tax charged on a car lease in California?
On the lease payments, not the car's full price. The lessee owes use tax on each payment, and the dealer or leasing company collects it with the payment (CDTFA Publication 34).
What is a money factor?
The interest charge on a lease, written as a small decimal. Multiply it by 2,400 for a rough APR: a money factor of 0.0025 is about 6%.
What is a residual value?
What the lease says the car will be worth at the end of the term. It's on the lease quote. The calculator also uses it as the car's value if you buy, so both sides use the same estimate.
What does this leave out?
Mileage limits and over-mileage charges, wear-and-tear fees at lease end, insurance, yearly registration renewals and maintenance. If you drive a lot or keep cars a long time, those usually favor buying.
Sources
All read on October 31, 2026. Tax and DMV figures use the out-the-door calculator's sources.
- California Department of Tax and Fee Administration, Publication 34, "Motor Vehicle Dealers" (October 2025). On a lease, the lessee owes use tax on the lease payments, which the dealer collects with each payment.
- Omni Calculator, "Money factor calculator". Money factor = interest rate / 2,400, so APR is about the money factor × 2,400.