Lease vs Buy Calculator

Compare over the same horizon

The comparison only works if both options cover an identical period. Buying and keeping an asset for ten years against a three-year lease is not a comparison, it is two different decisions. Set the horizon first, then work out what each option costs across it, including what you own at the end.

What buying actually costs

Not the purchase price. The real cost is depreciation, the value lost over the period, plus financing interest if borrowed, plus maintenance and insurance, minus whatever the asset is worth when you sell. An asset bought for 30,000 and sold for 18,000 after three years cost 12,000 in depreciation, not 30,000. This reframing is what most naive comparisons miss and it usually favours buying more than people expect.

What leasing actually costs

Payments across the term plus the initial payment, plus any excess mileage or wear charges at return, plus the fact that you own nothing at the end. Lease pricing is built from the same depreciation, with the lessor's financing cost and margin added, which is why leasing is structurally more expensive than buying over a long horizon and roughly competitive over a short one.

The capital you did not spend

Buying ties up money that could have been invested or used to repay debt. A fair comparison assigns a cost to that, at your borrowing rate if the alternative is debt or a conservative return if not. This is the strongest genuine argument for leasing and is usually omitted from lease-versus-buy analyses that conclude buying always wins.

Where each fits

Buying wins on long horizons, high usage, and where you will keep the asset well past the point it is paid off. Leasing wins where you need predictable costs, where the asset changes rapidly, where usage is genuinely low, or where a business can deduct lease payments more favourably than depreciation. Tax treatment differs by jurisdiction and entity and can reverse the answer entirely, so check it rather than assuming.