Read this first

This tool is a model, not a prediction and not a tax calculator. It estimates the shape of a long-run decision by applying documented, simplified assumptions to the numbers you enter. It does not know your exact state and local tax rules, and it cannot know what your particular car will actually cost to maintain. Use it to compare paths and see what drives the difference — not to produce a figure to file, budget, or rely on to the dollar.

The approach

We model years of ownership, not a single dealer deal.

Most buy-versus-lease tools try to score the specific offer in front of you. This one does something different: it follows real life over a horizon you choose — 3, 6, 9, or 12 years. On the buy side, one person purchases a single vehicle and keeps it the whole time. On the lease side, another person signs a fresh three-year lease each cycle, always driving something newer. The model then reports the numbers you actually feel: your monthly payment, your out-of-pocket cost per mile, and the resale value a buyer still owns at the end.

Taxes

Sales and lease taxes.

The model carries an editable rule for all 51 U.S. jurisdictions (the 50 states plus the District of Columbia). Each rule combines a state sales-tax rate with a typical local add-on to form the combined rate shown on the page. Local rates vary widely within a state, so we use a reasonable statewide-average add-on as the default — and you can overwrite the combined rate for your own town at any time.

How that rate is applied depends on whether you buy or lease:

  • Buying incurs a one-time sales tax on the vehicle price (net of a trade-in credit where the state allows one; some states, such as California, give no trade-in credit). In the model this tax is financed into the loan, so you also pay interest on it over the term.
  • Leasing is taxed by one of several methods, because states differ: tax on each monthly payment (the most common), tax on the full vehicle price at signing, tax on the sum of all payments up front, tax on payments plus any cash cap-cost reduction, or no lease sales tax at all. A handful of states also tax leases at a rate different from their general sales-tax rate, which the rule captures separately. Because a lease signs a new car every three years, an up-front lease tax can be charged once per cycle.

Some jurisdictions also levy an annual excise or personal-property tax on a vehicle you own. The model supports the common shapes of that tax — a percentage of an age-based value, a dollar amount per $1,000 of an age-based valuation, or a flat annual charge — using approximate age-depreciation schedules.

This is not a tax calculator

Vehicle tax rules vary by state and by locality, carry exceptions, and change over time. The values here are illustrative approximations chosen for education, not a substitute for your state and local rules. The rule set is dated and reviewed periodically (most recently reviewed for 2026), but you should verify your own numbers before relying on any figure. Nothing here is tax advice.

Maintenance & repairs

Maintenance estimates in three separate buckets.

Real maintenance is lumpy and uncertain, so the model does not use a single flat annual figure. Instead it generates events from a service schedule and keeps three categories separate:

  • Scheduled maintenance — routine service due by mileage and/or time for a mainstream, non-luxury gasoline vehicle: oil and filter, tire rotations, cabin and engine air filters, brake-fluid and transmission-fluid service, coolant, and spark plugs, each on its own interval.
  • Wear items — condition-based parts estimated by typical replacement interval, such as tires, front and rear brakes, and the battery. These are estimates of when a part tends to need replacing.
  • Repair reserve — a smoothed allowance for unscheduled repairs that grows as a vehicle ages (nothing set aside for the first few years, then a rising yearly amount). Because it reflects an aging, owned car, it applies only to buying; a leased car stays new, so it carries no reserve.

A few controls shape these figures. A cost-profile multiplier scales scheduled and wear costs up or down for a lower- or higher-cost vehicle (it does not touch the repair reserve). Costs are inflated year by year at a rate you set. A “maintenance included” period zeroes out scheduled service for its duration — useful because many new cars include scheduled maintenance for the first few years, and because a leaser, always in a newish car, may be covered for much of the comparison. On the lease side the model runs three fresh vehicles in sequence, each reset to zero age and mileage, so wear items only appear if a short lease actually reaches their threshold.

We can’t predict your real maintenance

These are rule-based averages for a typical vehicle, not a forecast for your car. What you actually spend depends on the specific make and model, how and where you drive, how long you keep it, and plain luck. Two identical cars can cost very different amounts to keep on the road. Treat the maintenance output as a reasonable planning estimate that you can adjust — every schedule value on the calculator is editable — not as a bill you should expect.

Depreciation & equity

A standard used-car depreciation curve.

Depreciation is the value a car loses as it ages, and the used market is fairly consistent about it: a new vehicle sheds roughly a fifth of its value in the first year and then about 15% of the remaining value each year after, which the model interpolates month by month across the comparison. That curve drives the resale value a buyer holds at the end.

From it the model derives equity — what the car is worth once you subtract any loan balance you still owe. A buyer who has paid the loan down keeps that resale value as money in hand; a leaser hands every car back and ends with zero. Early on, when tax and fees have been financed in, a buyer’s equity can even be briefly negative before it climbs. That gap between the two paths is one of the clearest differences the model surfaces.

The bottom-line number

Cost per mile ties it together.

Cost per mile is the total you pay out of pocket divided by the miles you drive, folding payments, fees, taxes, and upkeep into one figure. A lease tends to hold a steadier cost per mile because it resets its signing costs every cycle; a purchase costs more per mile early, then drops sharply once the loan is paid and you are mostly buying oil changes and the occasional repair. It is the fairest single yardstick the model produces — but it is still only the money side of the decision.

One cost the model deliberately leaves out is fuel. What you spend at the pump (or the plug) varies a great deal from one vehicle to the next — efficiency, engine size, and whether the car is gas, hybrid, or electric all move it — so pinning a single number on it would add noise rather than clarity. Because both sides of this comparison assume the same car, fuel costs are roughly equal either way and would largely cancel out; if fuel matters to your decision, weigh it separately.

Limits

What a model like this can and cannot do.

Results can be very sensitive to their assumptions, especially over long horizons — which is exactly why every meaningful assumption is visible and editable on the calculator. A model’s job is to show you the shape of a decision and which inputs move it most, not to promise a specific dollar amount. It cannot account for your full circumstances, your exact local taxes, your particular car’s reliability, or the value you place on driving something new. These tools are educational, not financial or tax advice. For the standards behind all of our tools, see our Calculator Methodology and Calculator Testing pages.

Ready to try it? Open the Buy vs. Lease a Car calculator, or browse the underlying per-state tax assumptions in the vehicle tax rules reference.

Related reading: Calculator Methodology · Data Sources · Calculator Testing · Editorial Policy.