The Finance Algorithm

Lease vs Buy Calculator

Compare the cost of leasing versus buying a car outright

Updated October 2026Built and checked by MaverickHow it's calculatedReport an error

Your numbers

Updates as you type
$
$45k

Full purchase or lease base price

$
$650

Monthly lease cost quoted

36
$
$20k

Price to buy at end of lease

%
7.5%

Rate if you bought outright

60
$
$5k
$

If you bought it, what it would sell for then - check listings for the same model at that age

15,000

Expected yearly driving (lease has limits)

The button asks our AI to explain these figures in words.

Lease vs buy

Winner

Buy

cheaper net cost

Savings

$734

vs the other option

Lease total

$23,400

lease payments over the term

Buy net

$22,666

interest + value lost over the term

Side-by-side monthly cost

The lease payment against the loan repayment if you bought.

$650Lease$802Buy (loan)

Money in vs equity out

Both over the lease term: lease payments, against the interest plus the value the car loses if you buy.

$23,400Lease (no equity)$22,666Buy (net of resale)
Trade-offs
Lease = flexibility. Buy = equity.
Leasing gives you a fresh car every 3 years and bundled servicing , but you build no equity. Buying costs more out of pocket but leaves you with an asset worth $29,000 at the end. Lease km limits also matter: high-mileage drivers usually buy.

How it works

Leasing means lower or fixed payments for a set term and no car at the end unless you pay the residual. Buying with a loan means owning a car that's worth something when you sell. This calculator compares them over the lease term: the lease payments against the interest you'd pay on a loan plus the value the car would lose, from your estimate of what it would be worth at the end of the term.

  1. 1Enter the vehicle price and the lease payment and term you've been quoted.
  2. 2Enter the residual you'd pay to keep the car at the end of the lease.
  3. 3Enter the loan rate, term and deposit if you bought it instead.
  4. 4Estimate what the car would sell for at the end of the lease term.

The figures today

As of 7 November 2026, the lowest car loan rate from a bank or lender is 5.74%, from Westpac's Car Loan, while the typical best across 42 institutions is 6.99%. The lowest carmaker finance rate is 2.70%, from Chery Motor Finance's Chery 4.46% EV Comparison Rate Offer, while the typical best across 12 institutions is 4.99%.

Car loan rates

Worked examples

3-Year Comparison

A $45,000 car: lease at $650 a month for 36 months, or buy with a $5,000 deposit and a 7.5% loan over 60 months. After 3 years the car should be worth about $29,000.

Vehicle price
$45,000
Monthly lease payment
$650
Lease term (months)
36
Lease residual/buyout
$18,000
Loan interest rate
7.5%
Loan term (months)
60
Deposit available
$5,000
Car's value at the end of the lease term
$29,000

Leasing costs $23,400 over 3 years and leaves no car unless you pay the $18,000 residual. Buying costs about $6,666 of interest over the same 3 years plus $16,000 of lost value: $22,666, about $734 less - before running costs and whatever the lease includes.

Questions people ask

Is leasing a waste of money?
Not necessarily. You pay for the use of the car rather than owning it, often with fixed costs. Whether it costs more than buying depends on the lease payments against the interest and lost value of buying - which this calculator compares.
Can I buy the car at the end of a lease?
Many leases let you pay the residual to keep the car. That's worth it if the car is worth more than the residual, and not if it's worth less.
What are the hidden costs of leasing?
Excess kilometre charges, wear and tear charges and early termination fees, all set in the contract. Read them before you sign.

The terms, in plain English

Residual Value
The guaranteed future value at lease end - the price to buy the car if you want to keep it.
Kilometre allowance
The kilometres the lease allows over its term. Going over attracts a per-kilometre charge set in the contract.
Equity
The value you've built in an owned car (market value minus remaining loan).

Official sources

Car Loan Calculator

Calculate buying costs

Novated Lease Calculator

Salary sacrifice car leasing

Total Cost of Ownership

Full cost comparison