How to Calculate EV Lease vs Buy
What is EV Lease vs Buy?
The EV Lease vs Buy Calculator compares the total cost of leasing versus purchasing an electric vehicle over a given period, factoring in tax credit access, depreciation risk, and monthly cash flow differences.
Formula
Lease Total = (Monthly Payment x Term) + Down Payment + Fees; Buy Total = Purchase Price + Interest - Resale Value - Tax Credits
- MP
- Monthly Payment ($/month) — Monthly lease or loan payment amount
- RV
- Residual Value ($) — Guaranteed vehicle value at lease end, or estimated resale value for purchase
- MF
- Money Factor (dimensionless) — Lease financing rate; multiply by 2,400 to convert to approximate APR
- APR
- Annual Percentage Rate (%) — Loan interest rate for purchase financing
Step-by-Step Guide
- 1Enter vehicle MSRP, lease terms (monthly payment, down payment, term), and money factor
- 2Input purchase financing terms (loan rate, term, down payment)
- 3Add applicable EV tax credits (leases access commercial credit with no income/MSRP caps)
- 4Compare total costs and monthly cash flow for each scenario
Worked Examples
Input
$45,000 EV: Lease $399/mo, $2,000 down, 36 mo; Buy $0 down, 5.9% APR, 60 mo
Result
Lease total: $16,364; Buy total: $52,131 minus $22,000 resale = $30,131 net cost. Buy saves $13,767 over 5 years.
Input
$55,000 EV, buyer exceeds income limit but lease captures $7,500 credit
Result
Lease effectively discounts to $47,500 equivalent — leasing wins by $4,200 over 3 years
Common Mistakes to Avoid
- ✕Forgetting that leases can access the full $7,500 commercial EV credit regardless of your income or the vehicle MSRP
- ✕Not accounting for rapid EV depreciation — EVs lose 40-50% value in 3 years, making leasing a hedge against depreciation risk
- ✕Ignoring mileage limits on leases (typically 10k-12k mi/yr) which may not suit high-mileage drivers
Frequently Asked Questions
Is it better to lease or buy an EV in 2025?
Leasing often wins if you want the latest technology every 3 years, exceed income limits for buying credits, or want to avoid EV depreciation risk. Buying wins if you plan to keep the car 7+ years and qualify for the full purchase credit.
Do leased EVs qualify for the $7,500 tax credit?
Yes, through the commercial clean vehicle credit. The leasing company claims it and typically passes savings to you as a lower payment or cap cost reduction, with no MSRP or income restrictions.
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