This calculator helps you decide whether it is better for you to buy or lease a car. It assumes you will not exercise the purchase option at the end of a lease. However, at the end of a vehicle loan, you will own the car. Two factors included in the calculation are car depreciation and financing expenses. The yearly cost of owning a vehicle declines sharply after the first few years. Both the car depreciation and financing costs are less. The first year of a lease is the most expensive due to extra financing charges. When leasing a car, you do not incur depreciation expenses.