How is the cost of buying calculated?

The tool finances the price minus your deposit at the loan rate over the chosen period, adds the deposit, then subtracts the resale value you keep at the end. That net figure is the true cost of owning over the period.

What does the lease total include?

It includes every monthly lease payment over the period plus any upfront or initial rental. Nothing is recovered at the end of a lease, so there is no resale value to subtract.

Does this account for tax and insurance?

No. To keep the comparison clear it covers finance cost, deposit, resale and lease payments only. Insurance, tax, servicing and mileage penalties vary widely, so add those separately. All maths runs in your browser.

What loan formula does the buy side use?

It uses the standard amortising-loan payment formula on the financed amount (price minus deposit): payment = P·r·(1+r)^n / ((1+r)^n − 1), where r is the monthly rate and n is the number of months.

Is leasing or buying usually cheaper?

It depends on the resale value. Because buying lets you recover money when you sell, a car that holds its value well usually favours buying, while heavy depreciation or low monthly lease deals can favour leasing. This calculator gives the answer for your specific numbers.

What is the resale value field for?

It is the amount you expect the asset to be worth at the end of the comparison period if you bought it. The tool subtracts it from your total payments because you keep that value, which is the key advantage buying has over leasing.

Can I use this for equipment, not just cars?

Yes. Any asset you can either lease or buy on finance — vehicles, machinery, IT hardware — works the same way: enter the cash price, finance terms, lease terms and expected resale value.

Lease vs Buy Calculator

Leasing looks cheaper month to month, but buying lets you recover value when you sell. This calculator puts both options on the same footing over the same period so you can see the real difference in total cost. It suits anyone deciding whether to lease or finance a car, van or piece of equipment.

How it works

The two paths are evaluated over the same number of months (years × 12):

Buy with finance: the amount financed is price − deposit. The tool computes the monthly repayment with the standard amortising formula payment = P·r·(1+r)ⁿ / ((1+r)ⁿ − 1), where r is the monthly rate (annual rate ÷ 12 ÷ 100) and n is the number of months. Total cost = (monthly payment × months) + deposit − resale value, because the resale value is money you keep.
Lease: total cost = (monthly lease payment × months) + any upfront rental. Nothing is recovered at the end, so there is no resale offset.

It then subtracts the buy net cost from the lease total to show which is cheaper and by how much. Tax, insurance and servicing are excluded so the finance comparison stays clear.

Example

A £30,000 car over 3 years (36 months), £3,000 deposit, 7.5% loan rate, £15,000 resale; lease at £330/month with £1,980 upfront:

Option	Calculation	Total
Buy	£842 × 36 + £3,000 − £15,000	≈ £18,298
Lease	£330 × 36 + £1,980	£13,860

Here leasing is about £4,400 cheaper over three years, mostly because the lease monthly is low relative to the car’s depreciation.

All maths runs privately in your browser — nothing is uploaded.