Australia Lease vs. buy (car) calculator

How leasing and buying compare

A complete lease-vs-buy comparison needs the full economics on both sides over the same period — not just monthly payment.

Lease total cost: down payment / cap-cost reduction + sum of monthly lease payments + acquisition / disposition fees + any excess-mileage or wear-and-tear charges at return. Equity at the end: zero.

Buy total cost (same period): down payment + sum of loan payments + interest paid, minus resale or trade-in value at the end (equity you keep).

The lease usually looks cheaper monthly because you're only paying for depreciation during the lease period plus interest on the residual value — not the full vehicle cost. But buying leaves you with an asset at the end.

Worked example

$40,000 vehicle, 3-year period:

• Lease: $0 down, $499/month → $17,964 total. Walk away with nothing.
• Buy: 10% down ($4,000), $36,000 loan at 7% / 5 years → $713/month. After 3 years: paid ~$34,000 total; car worth ~$22,000 → net cost ~$12,000 — plus you keep going (or sell).

Buying then keeping the car several more years is almost always the cheapest path.

When leasing makes sense

• You want a new car every 3 years and won't keep one for 8+
• You drive under the mileage cap (typically 10,000–15,000 miles/year)
• Cash flow matters more than total cost (e.g. self-employed people deducting lease payments)
• You don't want to deal with selling the car at the end

When buying makes sense

• You'll keep the car 5+ years (ideally 8+)
• You drive a lot — leases penalise high-mileage drivers harshly ($0.15–$0.30/mile over the cap)
• You want to modify the vehicle
• You want the freedom to sell at any time

Common mistakes

• Comparing lease payment to loan payment. They're not equivalent — the lease has no equity at the end.
• Overlooking mileage limits. 5,000 excess miles at $0.20/mile = $1,000 surprise at lease-end.
• Forgetting wear-and-tear charges. Lease companies are stricter than expected; small dents, interior wear, and tire wear all get charged.
• Stacking leases forever. Cheaper monthly, but you have a car payment for life with nothing to show for it.

What this calculator doesn't cover

• Single-pay leases (paying the full lease cost upfront)
• Subvented lease programmes (manufacturer discounts on the money factor)
• Lease buyout at end (using the contracted residual to purchase)
• Region-specific tax treatment (some jurisdictions tax only the lease payment; others tax the full vehicle value)