Canada's most transparent
lease vs finance calculator
Built on real math, not guesswork. No dealership affiliations, no lender relationships, no sponsored results.
Why we built this
LeaseOrFinance.ca was built out of frustration. Every lease vs finance "calculator" online either asks you two questions and spits out a guess, or it's published by a company with a financial interest in your answer.
Canadians overpay by an estimated $3,200–$8,000 per vehicle due to financing structure, unnecessary add-ons, and inflated residuals. Walking into a dealership without a clear, independent answer is how that overpayment happens. We built the tool we wished existed.
Why most tools get it wrong
Most lease vs finance calculators treat Canada like the United States. They apply the same tax logic, the same depreciation assumptions, and the same residual value estimates — which means their answers are often wrong for Canadian buyers by hundreds of dollars per year.
Canadian Tax Treatment of Leases Is Fundamentally Different
In Canada, HST/GST/PST is applied to each monthly lease payment — not the full vehicle value. In Ontario (13% HST), a $600/month lease payment becomes $678 after tax. A financed vehicle has tax applied once at purchase on the full capital cost. Our tool calculates the true after-tax monthly cost for both options using your province's actual tax rate.
Residual Value Is the Most Important — and Most Ignored — Number
A lease is essentially a loan on the depreciation of a vehicle. The residual value (what the car is worth at lease-end) determines how much depreciation you're financing. Manufacturers set residuals strategically — sometimes inflating them to make a lease appear cheaper. Our tool cross-references manufacturer-published residuals against actual Canadian Black Book depreciation data to flag when a residual is inflated or deflated.
Mileage Overage Is a Hidden Tax
Standard Canadian leases cap at 16,000–24,000 km/year. Every kilometre over your cap costs $0.10–$0.15. At 30,000 km/year on a 20,000 km cap, that's 10,000 km × $0.12 = $1,200/year — $100/month in invisible cost. Most calculators ignore this entirely. We compute it up front and fold it into the true lease cost before making a recommendation.
Money Factor ≠ Interest Rate
The money factor on a lease is not an interest rate — it's a fraction that must be multiplied by 2,400 to convert to an APR equivalent. A money factor of 0.00125 = 3% APR. Dealers rarely volunteer this conversion. We do it automatically.
Canadian provincial tax rates
Our tool applies your province's exact tax rate to both the lease and finance calculation so you're comparing true after-tax costs.
| Province | Tax Rate | Applied To |
|---|---|---|
| Ontario | 13% HST | Each lease payment / full purchase |
| British Columbia | 5% GST + 7% PST | Each lease payment / full purchase |
| Alberta | 5% GST only | Each lease payment / full purchase |
| Quebec | 5% GST + 9.975% QST | Each lease payment / full purchase |
| Manitoba | 5% GST + 7% PST | Each lease payment / full purchase |
| Saskatchewan | 5% GST + 6% PST | Each lease payment / full purchase |
| Nova Scotia | 15% HST | Each lease payment / full purchase |
| New Brunswick | 15% HST | Each lease payment / full purchase |
| Newfoundland | 15% HST | Each lease payment / full purchase |
| PEI | 15% HST | Each lease payment / full purchase |
Our methodology
Every analysis runs the following calculations before producing a recommendation.
Who built this
LeaseOrFinance.ca is an independent Canadian tool with no dealership affiliations, no lender relationships, and no sponsored results. We make no money from your financing decision.
The tool is, and always will be, free.
Data sources: Bank of Canada overnight rate, manufacturer OEM lease programs, Canadian Black Book residual guides, provincial tax schedules.