Leasing
planned use with return rules
check contract
Guide
Leasing, financing or cash purchase: compare car cost properly
For a car, the lowest monthly payment often looks most attractive. The real decision needs total cost, resale value, interest, tied-up cash, return conditions and mileage together.
Quick answer
Which option is cheapest in the model?
Leasing can preserve liquidity, financing spreads the purchase price and cash purchase avoids loan interest. The best path depends on resale value, interest, holding period and cash need.
Example
Example: one car, three acquisition paths
Decision focusWhich option creates the lowest cost over the holding period?
Main leverMonthly payment, down payment, interest, resale value and tied-up cash
Separate checkReturn rules, excess mileage, maintenance, credit terms, taxes and contract details
Next stepCompare the cheapest model option with real offers and side conditions
Decision view
Payment, resale value, tied-up cash
The visual separates the three paths by cost logic: use against payment, ownership with loan and ownership against tied-up cash. This keeps the monthly payment from being confused with the full decision.
The three areas of interpretation
The colours keep result, main lever and separate checks clearly separated.
Resultcheapest option over the period
Main leverpayment, rate, resale value and term
Separate checkcontract, return rules and running costs
The comparison is useful only when the cheapest model option is read together with liquidity, resale-value risk and contract conditions.
Calculation
Calculation method and model limits
The calculator estimates each option over the same holding period. Leasing, financing and cash purchase are compared by total cost, monthly equivalent and cost per kilometre.
Enter common basis
Vehicle price, holding period, mileage and resale value define the frame.
Calculate lease cost
Monthly payments, upfront payment and return buffer are added.
Model financing
Payments, remaining balance and resale proceeds are combined over the holding period.
Assess cash purchase
Purchase price, resale value and foregone return on tied-up cash are compared.
The result shows the cheapest model option and the gap to the second-best option.
Simplified formula
Lease = payment × months + upfront payment + return charges. Financing = down payment + payments made + remaining balance − resale value. Cash purchase = purchase price − resale value + foregone return. Example: 35,000 vehicle price, 48 months holding period and 18,000 km per year are applied equally to all three options.
If-then rules
If-then rules for the decision
If leasing wins mainly because the payment is low
check upfront cost, return charges and mileage rules especially carefully.
If financing wins narrowly
review remaining loan balance, interest rate and resale proceeds over the same period.
If cash purchase looks cheapest
check whether the loss of liquidity and foregone return fit your budget.
Step by step
How to interpret this topic
The monthly payment is not a total-cost comparison
A low payment can be bought with upfront cost, long commitment or return restrictions. Total cost is therefore more important than the payment alone.
Resale value and holding period shape buying options
For financing and cash purchase, resale value strongly affects cost. An overly optimistic resale value can make buying look too attractive in the model.
Leasing needs contract review
Mileage limit, return condition, service packages, delivery and fees can change the leasing advantage. The calculator does not replace the actual offer.
Liquidity remains a separate decision
Cash purchase can look good in total cost, but ties up money. Financing or leasing may still make sense if liquidity matters more.
Checklist
Checklist before deciding
- Compare all options over the same holding period.
- Use a realistic resale value.
- Check lease return rules and excess mileage.
- Review financing rate, remaining balance and prepayment options.
- Compare cash purchase with liquidity and alternative return.
Common mistakes
Common car-cost comparison mistakes
Looking only at the monthly payment
The payment hides upfront cost, resale value, return conditions and tied-up cash. This can make an offer look cheaper than it is over the holding period.
Using too high a resale value
A high resale value lowers model cost strongly. For a cautious decision, resale value should be realistic or conservative.
Comparing cash purchase without opportunity cost
Paying cash ties money up in the car. That liquidity may be missing for other goals.
FAQ
Leasing, financing and cash purchase questions
Is leasing cheaper than buying?
Not automatically. Leasing can look cheaper each month, but upfront payment, return rules and mileage can reduce the advantage.
Why does resale value matter?
With financing or cash purchase, you may sell the car later. This resale value lowers cost, but it is uncertain.
Are running costs included?
The calculator focuses on acquisition and financing structure. Insurance, tax, maintenance and repairs should be compared separately afterwards.