Buy vs lease calculator for vehicles and equipment
Short answer
Leasing costs less each month, but buying usually costs less overall because you keep a vehicle that still has resale value. The fair comparison is the net cost over the same period: everything paid, minus what you own at the end, minus any business tax savings. For 2026 the CRA limits business lease deductions to $1,100 a month.
Compare buying and leasing
BC 12%, ON 13%, AB 5%
0% for personal use
Verdict
Leasing costs about $43 less over 48 months.
Buy
Lease
Is it cheaper to buy or lease a $45,000 car in Canada?
For personal use, a $45,000 car financed over 48 months at 6.5% costs $1,076.66 a month; leasing it at 5.5% with a 50% residual costs $620.55 a month including tax.
After 48 months the buyer still owns a car worth about $23,490. Counting that, leasing is about $43 cheaper.
What changes for a business vehicle?
Used 100% for business at a 30% marginal tax rate, buying saves $11,167 in tax and leasing saves $8,936, so buying comes out about $2,189 ahead.
What are the 2026 CRA automobile deduction limits?
The Department of Finance kept most limits steady for 2026 and raised the passenger vehicle CCA ceiling Department of Finance.
- CCA ceiling (Class 10.1): $39,000 before tax, up from $38,000.
- Zero-emission vehicles (Class 54): $61,000 before tax.
- Deductible loan interest: $350 a month.
- Deductible lease payments: $1,100 a month before tax.
How do I decide whether to buy or lease?
- 1
Use the same time period
Compare both options over the lease term, for example 48 months.
- 2
Add up everything you pay
Include down payments, every monthly payment and sales tax on both paths.
- 3
Subtract what you keep
If you buy, subtract what the vehicle is worth at the end of the term. If you lease, you keep nothing.
- 4
Include business tax savings
If the vehicle is used for business, subtract the tax saved from CCA and loan interest (buying) or lease payments (leasing), within the 2026 CRA limits.
Frequently asked questions
Does the Bank of Canada rate affect car loans and leases?
Indirectly. Lenders set car loan and lease rates, but they tend to move with the Bank of Canada policy rate, which was raised to 2.50% on October 28, 2026.
When does leasing make more sense than buying?
Leasing tends to make sense when you want a new vehicle every few years, drive within the kilometre allowance, and value a lower monthly payment over owning the vehicle outright.
Where do these numbers come from?
Lease payments use the standard depreciation plus rent-charge method; loans use monthly compounding. Your actual rates, fees and residual values come from your lender or dealer.