Result
Total under the lease (with buyout)
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This calculation is for informational purposes only and does not replace advice from a qualified professional. Formulas and rates may not fit your exact situation — double-check the figures before making decisions.
How it is calculated
Total under the loan = down payment + annuity payment on (asset cost − down payment) × term — the loan fully pays off the asset, no residual payment remains. Total under the lease = down payment + lease payment (on the amount net of down payment and the discounted residual) × term + the residual value itself at buyout.
At the same rate for both options, the nominal (undiscounted) total under the loan usually comes out lower than under the lease with buyout — because the large residual payment at the end of the lease is added to the total without discounting, while the monthly payments are computed accounting for the time value of money. That doesn't mean leasing is objectively more expensive: at different rates, tax benefits on lease payments, or a different deal structure, the comparison can flip.
The comparison here covers only the direct money cost of owning the asset through to full buyout. It doesn't account for differences in balance-sheet treatment, tax benefits (see the separate leasing tax savings calculator), or the flexibility to walk away from a leased asset without a mandatory buyout, which a loan doesn't offer.