Lease vs Finance Calculator Canada
This comparison does not predict vehicle resale value or tax treatment.
Important note
Two Ontario lease details hide outside the totals above. First, HST: on a lease you pay 13% on each monthly payment, not on the car’s full price up front — one reason lease payments look lighter than finance payments on the same car. If you buy the car out at the end of the lease, 13% HST applies to the buyout price as well. Second, the return: kilometres beyond your allowance are commonly billed at $0.10–$0.25 per km, and excess wear is assessed when you hand back the keys — neither appears in any payment quote. And under OMVIC’s all-in pricing rule, a dealer’s advertised lease price must already include all fees except HST and licensing.
How this lease vs finance calculator works
Unlike a loan calculator, this tool does not compute a payment for you — you enter the payments yourself (usually from dealer quotes) and it compares the scheduled cash outlays of the two paths. The lease total is lease monthly payment × months + upfront down payment + upfront fees. The finance total is finance monthly payment × months + down payment + fees. The residual / buyout value is displayed exactly as you entered it. The final line, "finance outlay less residual," is the finance total minus the residual — that is what financing costs if the car ends up worth exactly the residual value and you effectively "sell it back to yourself" at that price. Note the asymmetry: the residual is not subtracted from the lease total, because under a lease you return the car instead of keeping an asset. Left out of these totals: sales tax on the payments, mileage overage charges, wear-and-tear fees, insurance differences and resale uncertainty. For an after-tax comparison in Ontario, enter payments that already include the 13% HST.
A worked example
Use the calculator's default quotes: a $408.29/month lease for 60 months with no down payment, no fees and a $20,000 residual, against a $781.27/month finance option on the same terms. Lease scheduled outlay = $408.29 × 60 = $24,497.40. Finance scheduled outlay = $781.27 × 60 = $46,876.20. Finance less residual = $46,876.20 − $20,000 = $26,876.20. On these quotes, leasing costs about $2,379 less in scheduled cash — but the finance driver ends the term owning a car (assumed worth $20,000) while the lease driver returns the keys. So the real question is one judgment call: is $20,000 of retained value plus the freedom to sell, modify or drive unlimited kilometres worth the extra $2,379? Enter your own quotes and an honest residual guess to answer that for your deal.
Three tips for a fair lease vs finance comparison
- Enter tax-inclusive payments: Ontario's 13% HST applies to both and is one of the largest items the calculator does not add.
- Treat the residual as an assumption, not a promise. If the car depreciates faster than the buyout value, the finance side's true net cost rises — stress-test it with a lower residual before you commit.
- Mind the mileage clause. Leases commonly cap annual kilometres, and overage fees (often $0.12–$0.16 per kilometre) can erase a lease's cash advantage if you drive more than the contract allows.
Frequently asked questions
What is the residual or buyout value?
The pre-set value of the car at the end of the lease, agreed when you sign. If you want to keep the car, this is the price you pay to buy it out; if you return it, the dealer takes the car and the residual simply ends the comparison.
Does this calculator tell me which option is better?
No — it only compares the numbers you enter. Mileage limits, the freedom to sell or modify the car, wear charges, insurance differences and taxes can all change the decision, so use the output as a starting point, not a verdict.
Why isn't the residual subtracted from the lease total?
Because the lease driver does not keep the asset. At the end of a lease you return the car (or pay the buyout to keep it); subtracting the residual from the lease side would double-count value you never receive.
Are taxes included in the totals?
Only if the payments you entered include them. In Ontario, HST applies to lease and finance payments, so enter tax-inclusive figures — or add roughly 13% mentally — for a realistic comparison.
Does this tell me which option is better?
No. It only compares the numbers you enter. Mileage limits, ownership, depreciation, fees and taxes can change the decision.
Is the residual a guaranteed resale value?
No. It is simply the value entered for comparison.