Lease vs Buy Calculator
The residual value is what decides it.
Work out Lease vs Buy. The residual value is what decides it. Shows the working, not just the answer.
Cheaper over 5 years
Buying
345 a month buying against 450 leasing, once the residual is counted
The residual value decides this, and it is the figure people leave out. Buying costs more up front and leaves an asset; leasing costs less and leaves nothing. Comparing monthly payments alone always favours the lease and answers a different question entirely. Depreciation is the real cost of car ownership either way — a lease is essentially a way of paying for depreciation plus interest plus the lessor's margin. The longer you keep a bought car past the loan, the more the arithmetic tilts toward buying, because depreciation slows while payments stop. Leasing buys predictability rather than value: fixed costs, warranty cover throughout, and no exposure to what the car is worth at the end. Whether that is worth the premium is a question about your circumstances, not about the numbers.
How the Lease vs Buy Calculator works
Leasing against buying a vehicle over the years you will keep it, counting the value left in the car at the end. Comparing monthly payments alone always favours the lease and answers a different question.
Also known as: should i lease or buy a car · car lease versus finance · true cost of leasing a car · residual value after 5 years
Not financial advice. This calculator is for planning and illustration, not financial advice. Real products carry fees, taxes, and terms it does not model. Confirm figures with your lender or a qualified adviser before committing.
Frequently asked questions
Is leasing cheaper than buying?
Monthly, almost always. In total, usually not — because buying leaves you an asset and leasing leaves you nothing. The residual value is what decides it and it is the figure people leave out.
What is residual value?
What the vehicle is still worth when you are done with it. At 15% depreciation a year, a 30,000 car is worth about 13,300 after five years, and that is real money on the buying side of the comparison.
When does leasing make sense?
When you change cars often, when predictable costs matter more than total cost, or when the vehicle is a business expense with favourable treatment. It buys certainty rather than value.
What is the real cost of car ownership?
Depreciation, in almost every case — usually more than fuel, insurance and servicing combined for the first few years. A lease is essentially a way of paying depreciation plus interest plus the lessor's margin.
Does keeping a car longer change the answer?
Substantially, in favour of buying. Once the loan ends the payments stop while depreciation slows, so the cost per year falls steeply — which is why the cheapest way to run a car is to keep it.
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