Lease or buy calculator
Is it cheaper to lease or to buy? Enter a lease quote and the price to buy the same kind of car, and see what each costs you over 3, 5 and 7 years. The answer depends mostly on how long you keep your cars.
The lease quote
These are example numbers. Replace them with yours.
With tax included.
Down payment, fees and any first payment.
Buying the same kind of car
With tax and fees included.
A common range for a new car is 12 to 18 percent. Your guess drives the answer.
Use how fast this car's price really falls
Pick the car you are weighing and the yearly loss in value is filled in from what that model is listed for at each age, instead of a guess.
What each one costs you over time
3 years
Leasing$21,720
Buying, after selling the car$26,616
Leasing costs $4,896 less
By your guess the car would then be worth $29,478 and you would still owe $24,028.
5 years
Leasing$36,200
Buying, after selling the car$37,460
Leasing costs $1,260 less
By your guess the car would then be worth $21,298 and you would still owe $8,648.
7 years
Leasing$50,680
Buying, after selling the car$43,744
Buying costs $6,936 less
By your guess the car would then be worth $15,388 and the loan would be paid off.
Leasing is shown as the same lease again and again for the whole period. Buying is the down payment and payments, plus anything still owed, less what you sell the car for.
Leases limit your kilometres and charge for damage and wear. Add the cost of extra kilometres or repairs if they apply to you, and remember a lease leaves you with no car at the end.
Keep going with Uobo
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How it works
Leasing is counted as its payments plus the money due at signing, repeated on the same terms for as long as the period runs. Buying is the down payment and the loan payments, plus anything you still owe, less what you sell the car for.
The car's future value is your guess: the percent it loses each year. A common range for a new car is 12 to 18 percent a year. A higher guess makes buying look worse, so try a few.
The comparison is about money out of pocket. It does not count insurance, which is similar for both, or the freedom to change cars more often that leasing gives you.
Example: a $520 a month lease against buying a $48,000 car
The lease is 36 months with $3,000 due at signing. Buying has $5,000 down at 7.9% over 72 months, and the car loses 15% of its value a year. Over 3 years leasing costs $21,720 and buying costs $26,616, so leasing is cheaper. Over 7 years leasing costs $50,680 and buying costs $43,744, so buying is cheaper.
What this does not cover
- Your guess about the car's resale value drives the buying side, and nobody knows it in advance. Try different values.
- Leases limit your kilometres and charge for damage and wear. Add those costs if they apply to you. The lease kilometre overage calculator shows what extra kilometres cost.
- At the end of a lease you own nothing. At the end of a loan you own the car, which is the point of the longer periods.
Common questions
Is it cheaper to lease or buy a car?
For a short period leasing usually costs less per month, because you pay only for the part of the car's value you use. The longer you keep a car, the more buying tends to win, because you stop making payments and still own something.
How long should you keep a car before buying beats leasing?
It depends on the prices, the rate and how fast the car loses value. Many comparisons favour buying once you keep a car past about five years. This calculator shows 3, 5 and 7 years so you can see where it flips for your numbers.
What is a good residual value for a lease?
A higher residual means a lower payment, because the car is expected to lose less value. Cars that hold their value get higher residuals. Compare quotes from more than one dealer for the same car.
What does leasing not include?
Kilometres beyond the allowance, wear and damage beyond normal, insurance, and in most cases the right to buy the car cheaply. Read the lease terms before you compare.