How to use the Car Lease Calculator
- 1 Enter the negotiated price.
- 2 Enter your down payment.
- 3 Enter the residual value and lease rate.
- 4 Choose the term and province.
Worked example
A $45,000 car with $3,000 down, a 55% residual, a 5.99% rate over 48 months in Ontario. Depreciation is about $359 a month and the finance charge about $167, so the payment before tax is about $526. With 13% HST the payment is about $594 a month and total lease cost is about $31,529.
Features
Depreciation and finance
See how the payment is built.
Sales tax
Tax on each payment by province.
Total cost
All payments plus the down payment.
When to use it
Lease or buy
Compare with a car loan.
Dealer quotes
Check the dealer's numbers.
Term choice
Compare 36 and 48 months.
Down payment
See how cash down changes the payment.
Frequently asked questions
How is a lease payment calculated?
Depreciation (price minus residual, divided by months) plus a finance charge ((price plus residual) × rate ÷ 2400), plus sales tax.
What is the residual?
The car's expected value at the end of the lease, set by the leasing company. A higher residual means lower payments.
Is sales tax charged on lease payments?
Yes. In most provinces tax is charged on each payment.
Should I put money down?
A large down payment lowers payments, but you can lose it if the car is written off.
What about kilometre limits?
Leases include a yearly limit, often 16,000 to 24,000 km, with extra charges above it.
Can I buy the car at the end?
Yes, for the residual value plus tax and fees.
What is a money factor?
Some dealers quote the lease rate as a money factor. Multiply it by 2,400 to get the approximate interest rate.
What fees are charged?
Expect an acquisition fee, security deposit in some cases, licensing and a disposition fee at the end.
What about wear and tear?
At the end you may pay for damage beyond normal wear, such as dents, curb rash and worn tires.
Is leasing better for business?
Businesses can often deduct lease payments, subject to CRA limits for passenger vehicles.
Can I end a lease early?
Usually only with a large payment. Lease transfer websites can help you find someone to take over.
Is a lease cheaper than a loan?
Lease payments are usually lower, but you do not own the car. Over many years, buying and keeping a car often costs less.
Can I negotiate a lease?
Yes. Negotiate the price of the car first, then check the rate, residual and fees.
Is insurance more expensive on a lease?
Leasing companies often require higher liability limits and comprehensive coverage.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Reviewed by ToolsUnlocked Team · Last updated