Home
Tools
Auto
Lease vs Buy

Interactive guide · Calculator included

Lease vs Buy
the honest comparison

Leasing or financing? Compare total cost, resale value, and which option truly fits your driving and budget.

Total cost compared Resale value Leasing vs financing

Part 1 · The basics

Lease vs buy at a glance

Buying means financing to own: you pay a loan and own the car at the end. Leasing means paying to use the car for a few years, then returning it.

Neither is "better" in absolute terms — it depends on your mileage, budget and time horizon. This guide gives you the calculator and the criteria to decide.

Lease vs buy calculator

Car price ($)

Down payment ($)

Loan (buy)

Loan rate (%/year)

Loan term (months)

Lease

Lease monthly payment ($)

Lease term (months)

Resale value after the term ($)

Estimated value after the loan term — use the depreciation calculator.

Total paid (buy)

$35,000

Loan interest: $0 · Net cost after resale: $22,000

Total paid (lease)

$21,200

Lease monthly equivalent: $450

✓ Leasing costs less in total

Comparison of total paid, excluding insurance and maintenance. Buying keeps an asset (resale value); leasing returns the car.

Why choose

Why buy

✔You own the car — keep it 10+ years.
✔No mileage limits or wear-and-tear fees.
✔At the end you have an asset (resale) instead of nothing.
✔Better for high-mileage drivers.
✔Full freedom: sell, modify, or keep it.

Why lease

✔Payments are often lower than a loan.
✔Always drive a recent car under warranty.
✔No resale hassle or depreciation worry.
✔Ideal for low mileage and businesses.
✔Change cars every 2–4 years.

How to choose

Lease if: you drive under 15,000 km/year, want a recent car under warranty, and change cars every 2–4 years.

Buy if: you drive a lot, keep cars for years, or want an asset at the end.

The trap: a long lease with no mileage cap gets expensive fast. Always read the over-mileage fees.

Glossary

Residual value

The pre-agreed buyout price at the end of a lease (or the car's resale value).

APR

Annual Percentage Rate — the true cost of a car loan including fees.

Depreciation

The car's loss of value over time — your biggest hidden cost.

Mileage allowance

The annual km cap in a lease; exceeding it triggers fees.

Money factor

The lease equivalent of an interest rate.

Open vs closed-end

Closed-end (most leases): return the car. Open-end: you owe the difference if it is worth less.

FAQ

Lease vs buy FAQ

Is leasing cheaper than financing?

Payments are often lower, but you own nothing at the end. Over 4 years, buying is usually cheaper if you keep the car afterward; leasing wins if you change cars anyway.

What happens at the end of a lease?

You return the car, buy it at the residual value, or sometimes trade it for a new lease.

Can I go over the mileage allowance?

Yes, but over-mileage fees apply per mile/km. Estimate your mileage honestly before signing.

Is leasing good for business?

Often yes — predictable costs and no resale management. Check the tax treatment in your country.

What is the ideal term?

For leases, 24–48 months depending on needs. For buying, the longer you keep the car, the lower the annual cost.

Can I pay off a car loan early?

Generally yes, though prepayment penalties may apply. Read your contract.

Indicative calculations without insurance or maintenance. Verify real offers and contract fees.

Compare before you sign

Use the calculator above, then check fuel cost and depreciation for the full picture.

Fuel cost calculator → Depreciation →

Lease vs Buy the honest comparison