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Lease vs buy calculator
Leasing and buying are two ways to pay for the same thing: the use of a car for a few years.
This compares the cost of having a car for the same number of months either way.
Buying ties up the full price upfront, but at the end you own a car you can sell, so the real cost of owning it for that time is the depreciation you absorb, the price minus what you get back. Leasing spreads a fixed cost over monthly payments and an upfront sum, and at the end you hand the car back with nothing to sell. This tool puts the two side by side over the same number of months. Enter the cash price and the resale value you expect at the end for the buying case, and the upfront payment, the monthly payment and the term for the lease, and it returns the cost of owning for the term, the total cost of leasing, the equivalent monthly cost of owning, and which option comes out cheaper and by how much. The comparison is deliberately like for like on the cost of having the vehicle, so it leaves out a few things you should weigh separately: finance interest if you borrow to buy, insurance, servicing and tyres (often bundled into a lease but paid by you when you own), and any mileage or wear charges a lease can add at the end. Read the headline figure first, then adjust for those extras for your own situation. Leasing tends to win when you want a new car every few years, value predictable costs and low upfront outlay, and stay within the mileage cap. Buying tends to win when you keep cars for a long time, drive high miles, or choose a model that holds its value well, because once a bought car is paid off it keeps giving you use for only running costs.
How it works
- Enter the cash price to buy the car and the resale value you expect at the end of the term.
- Enter the lease upfront payment, the monthly payment, and the term in months.
- The tool works out the cost of owning as the price minus the resale value, the depreciation you take on.
- It adds the lease upfront to the monthly payments across the term for the total lease cost.
- It compares the two and shows which is cheaper, plus the monthly equivalent of owning.
cost to own = price - resale value; lease cost = upfront + monthly x months
The buying side takes the purchase price and subtracts the resale value you expect at the end, leaving the depreciation you absorb over the term. The leasing side adds the upfront payment to the monthly payment multiplied by the number of months. The tool compares the two totals, reports the difference, and divides the owning cost by the term to give a monthly figure you can set against the lease payment.
- price
- cash price to buy the car
- resale
- expected value at the end of the term
- upfront
- initial lease payment
- monthly
- lease payment each month
- months
- length of the term
What each route gives you
| Own an asset at the end | Buy | a car you can sell or keep |
| Lowest upfront cost | Lease | usually a few months of payments |
| Predictable fixed cost | Lease | servicing often included |
| Cheapest over the long run | Buy | once paid off, only running costs |
Worked example
A car costs 30,000 to buy and you think it will be worth 18,000 in three years; the lease is 2,000 upfront plus 300 a month for 36 months: owning for three years costs 12,000 in lost value, about 333 a month. The lease costs 2,000 plus 10,800, so 12,800 in total. Buying is cheaper here by 800, before counting any finance interest on a loan to buy or the servicing a lease might include. If the car instead held up better and was worth 21,000 at the end, owning would cost only 9,000 and buying would win by a wider 3,800; if it crashed to 13,000, owning would cost 17,000 and the lease would win.
Key facts
- The fair comparison is the depreciation you absorb when buying against the payments when leasing.
- Leasing means lower upfront cost and no resale risk, but you never own the car.
- Buying gets cheaper the longer you keep the car, since the outlay spreads over more years.
- The resale value you assume is the biggest swing factor in whether buying wins.
Tips
- Try a higher and a lower resale figure to see how sensitive the answer is to that guess.
- Add finance interest to the buying case if you would borrow rather than pay cash.
- Check what the lease includes, since bundled servicing and tyres can change the verdict.
- Mind the mileage cap on a lease; excess-mile charges can erase an apparent saving.
Frequently asked questions
Why compare depreciation against lease payments?+
Because that is the true cost of each route for the same period. When you buy, the money you spend is mostly recovered when you sell, so what it really costs you to use the car is the value it loses. A lease has nothing to sell at the end, so its cost is the payments. Lining those two up is the fair comparison.
What does the tool leave out?+
Finance interest if you borrow to buy rather than pay cash, insurance, road tax, servicing, tyres and repairs, and any excess-mileage or wear-and-tear charges at the end of a lease. Servicing and breakdown cover are sometimes included in a lease, which can close the gap, so adjust the result for your own deal.
When does leasing usually work out better?+
When you like changing car every two to four years, want low upfront cost and predictable monthly bills, drive within the mileage limit, and pick a car that depreciates quickly. You never own anything, but you avoid the resale risk and the cost of repairs as the car ages.
When does buying usually win?+
When you keep cars for a long time, drive high mileage that a lease would penalise, or choose a model with strong resale value. Once a bought car is paid for, every further year costs only running expenses, which spreads the original outlay thinner the longer you hold it.
Is PCP leasing or buying?+
A personal contract purchase sits in between. You pay monthly like a lease, but a large balloon payment at the end lets you buy the car if you want. If you keep handing the car back and starting again, it behaves like a lease; if you pay the balloon, it behaves like buying on finance. Compare it whichever way you actually plan to use it.
How accurate is the resale value I enter?+
It is the biggest unknown in the buying case, so the comparison is only as good as that guess. Use a valuation guide for the exact model, age and mileage you expect, and try a higher and a lower figure to see how much it changes the answer.
Things to watch
- The result excludes interest, insurance, servicing and lease excess charges; weigh those for your own deal.
- Resale values are uncertain and move with the market, so treat the buying case as an estimate.
- This is a cost comparison, not financial advice; read every lease or finance agreement in full before signing.
Last updated: 2026
This is an estimate for general guidance, not financial, tax, legal or medical advice. Figures can change and individual circumstances vary. Always confirm with an official source before making decisions.
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