Buying a car is cheaper over 10 years, but leasing has 30–40% lower monthly payments. The right choice depends on how long you keep vehicles, how much you drive, and your cash flow needs. Here’s the full Canadian analysis.
Lease vs. Buy: Side-by-Side ($45,000 Vehicle)
Factor
Lease (3 years)
Buy (6-year loan)
Monthly payment
$495
$735
Down payment
$0–$2,000
$5,000–$9,000
Term
36 months
72 months
Own the car
No
Yes (after payoff)
Total 3-year cost
$17,820
$26,460
Total 10-year cost
$59,400 (3 leases)
$52,920 + maintenance
Mileage limit
20,000 km/year
Unlimited
10-Year Total Cost Comparison
Scenario
Lease (3x 3-year)
Buy & Keep 10 Years
Payments
$59,400
$52,920
Down payments
$6,000
$7,000
Maintenance
$3,000
$8,000
Insurance (higher for lease)
+$3,000
—
Resale value at 10 years
$0
-$8,000
Net 10-year cost
$71,400
$59,920
Buying and keeping for 10 years saves about $11,500 over leasing.
When Leasing Wins
Situation
Why Lease
Business use
Lease payments are deductible (up to CRA limits)
Drive under 20,000 km/year
Mileage limits aren’t a problem
Want newest safety tech
New car every 3 years
Cash flow is tight
Lower monthly payments
Don’t want repair costs
Covered by warranty
When Buying Wins
Situation
Why Buy
Keep cars 5+ years
Cheaper over time
Drive over 20,000 km/year
No mileage penalties
Want to modify vehicle
No return conditions
Building equity
Car becomes an asset
Paid-off car eventually
$0 payments for years
Tax Implications
Factor
Lease
Buy
Personal use
No tax benefit
No tax benefit
Business use (self-employed)
Deduct lease payments (max ~$950/month)
Deduct CCA + interest
GST/HST
Included in payments
Paid upfront on full price
Bottom Line
Buy if you keep cars 5+ years and drive a lot. You’ll save ~$11,500 over a decade. Lease if you’re self-employed (tax-deductible) or want a new car every 3 years with lower payments. The worst option: buying new and trading in every 3 years — that combines the highest costs of both approaches.