Lease versus finance versus cash in Ontario
Over 36 months, on a $10,969 car
Money factor and residual, in plain wordsPaying cash and financing are approximately tied.
Counting what the car is still worth at the end, paying cash costs $7,527 over 36 months, against $7,607 for financing. That gap is $80. This is within $100 or 1% of the lower modelled cost. A different lease quote, resale value or cash opportunity rate could change the order.
Leasing lands exactly on financing at a residual of 62.1%, against the 51.5% this comparison used. Paying cash wins only if the money would have earned less than 6.8% a year; we charge it at 6.57%, the rate a borrower avoids paying. Our depreciation curve puts this car at 68.1% of its price at 36 months, which is not what a typical lease residual says. Those two sourced figures disagree, and on most scenarios that gap decides this page. Put the residual from your own quote in and see.
Financing
$261/mo
9.64% APR60 months7.29% to 11.99% for your credit
Cash at signing
$0
Paid by month 36
$9,402
Still owed at month 36
$5,680
Car worth at month 36Why being upside down matters
$7,475
Equity you keep
$1,795
Cost over 36 months
$7,607
Your 60 month loan runs past the 36 months compared here, so the balance still outstanding is counted as a cost and the car you own is counted back.
Leasing
$242/mo incl. HST
9.64% APR36 months9.64% illustrative rate based on the financing estimate
Cash at signing, including HST
$0
Before Ontario HSTMoney factor and residual, in plain words
$215
9.64% APR36 months9.64% illustrative rate based on the financing estimate
HST over the 36 months
$1,004
Residual at month 36
$5,649, 51.5%
Kilometre allowance
20,000 km a year
Equity you keep
None, you hand it back
Cost over 36 months
$8,727
You drive inside this allowance, so no excess kilometre charge applies.
Paying cash
$12,395
on the day of sale
Sales and luxury tax inside that
$1,426
Forgone earnings at 6.57%
$2,607
Car worth at month 36Why being upside down matters
$7,475
Equity you keep
$7,475
Cost over 36 months
$7,527
Forgone earnings are charged at the Bank of Canada average auto loan rate, because the rate a buyer avoids paying by not borrowing is the cleanest anchor our research carries. It is not a promised investment return, and the same charge applies to the down payment in the other two columns.
What actually differs
- A lease is taxed on the payments, not on the carMoney factor and residual, in plain words
- Ontario charges 13% HST on each lease payment, including the cash down payment when paid, which comes to $1,004 over 36 months. Buy the same car and the tax is $1,426, due at the sale and usually financed along with everything else. The lease treats your cash down payment as a reduction before tax; cash at signing includes its HST and excludes the first monthly payment. Refundable security deposits are not included. You never pay tax on the residual you hand back.
- You end with equity, or you end with nothing
- At month 36 the financed car is worth $7,475 against $5,680 still owed, so you hold $1,795. The lease ends with nothing: you hand the keys back. Buying it out at the $5,649 residual would be $1,826 below what we think it is worth.
- A lease caps how far you drive
- This comparison allows 20,000 km a year against the 20,000 km a year it assumes you drive. Go over and the contract charges a rate per kilometre it states itself. A car you own has no such line.
How we calculated this28 figures, all dated and sourced
Every figure below was read by this scenario while it was being calculated, in the order the calculation read it. Nothing here is decorative: remove one and the number above changes. Assumptions version 2026-10, compiled 2026-09-01.
Official energy, Weekly observed fuel price$1.826 a litre
Government of Ontario regular gasoline reading for Toronto (East/West average). This is a weekly observed market average, not a forecast or a station quote.
Official energy, Reference tou commodity rate$0.128 per kWh
Ontario Energy Board time-of-use commodity rates, weighted with the OEB reference consumption shares and effective 2025-11-01 through 2026-10-31. Electricity commodity rates only; fixed service and utility-specific delivery charges are excluded.
Verdict thresholds, Manageable maximum income share15%
10 to 15 percent of gross income is realistic for most Canadians.
Ontario tax, Harmonized sales tax rate13%
Registered dealer sale, new or used. Charged on the negotiated all-in selling price and collected by the dealer at the point of sale.
Licensing, Private sale transfer total CAD$60 to $120
Typical total for a private-sale transfer path, including the UVIP and the plate and permit issuance. Excludes the safety certificate, which report 01 section 2.7 leaves unpriced. Small and honest beats a padded guess here; the dollar impact is minor but the accuracy is a credibility signal.
Licensing, Used vehicle information package CAD$20
Mandatory for private sales. Set fines for failing to provide or deliver a UVIP rose to 140 dollars in January 2026.
Financing, Apr by credit band, Prime5.99% to 9.99%
Credit score 670 to 719. Most dealers and lenders set a mid 600s minimum score for standard approval.
Financing, Used vehicle apr spread1.30% to 2%
Derived, not separately sourced. Low end is blendedAprUsedVehicle low minus blendedAprNewVehicle low, 0.082 minus 0.069. High end is 0.095 minus 0.075. Report 01 section 2.3 states the spread exists and must be modelled but gives no spread figure of its own.
Insurance, By city, Toronto, Annual premium CAD$2,348 a year to $2,483 a year
Second-source pass, 1 September 2026. Toronto had one publisher behind it, ThinkInsure, and now has two. ThinkInsure publishes 2,483 for the window 31 May 2025 to 31 May 2026, confirmed this pass by direct fetch of https://www.thinkinsure.ca/car-insurance/toronto-quote.php rather than the search-indexed excerpt the previous note relied on. MyChoice independently publishes 2,348 for Toronto in its 22 June 2026 Ontario city table, up 5.26 percent year over year. The two are 5.7 percent apart measured on the lower figure, inside the 10 percent agreement bar, so the figure is the range spanning both published values and confidence stays medium on two agreeing publishers rather than one. Neither value was altered. asOf stays 2026-05-31, the close of the ThinkInsure window that sourceUrl points at.
Insurance, Ontario year over year increase4.45%
Ontario premiums rose roughly 4.45 percent year over year in 2026. The July 1 2026 reform made most accident benefits other than medical, rehabilitation and attendant care optional, which may lower premiums modestly, but the real movement will not be observable until Q1 2027.
Insurance, New driver, Full licence average annual premium CAD$2,105 a year
The all-ages full-G average from the same dataset, published beside the G2 one so the two are comparable. ThinkInsure, an Ontario brokerage, over a stated data window of 2022-01-01 to 2023-03-31. The as-of date is the close of that window rather than a publication date, because the window is the honest limit on the figure: no named publisher has released a G2-specific band since it closed. No insurer and no regulator publishes a G2 band at all, so a broker's dataset is the ceiling of the available evidence, which is why nothing in this group is high confidence.
Insurance, By licence class and age, Full age 26 to 30 annual CAD$2,437 a year
Full G licence, 26 to 30. The gap to the G2 figure opens to about 25 percent here, having been near zero in the teen bands. ThinkInsure, an Ontario brokerage, over a stated data window of 2022-01-01 to 2023-03-31. The as-of date is the close of that window rather than a publication date, because the window is the honest limit on the figure: no named publisher has released a G2-specific band since it closed. No insurer and no regulator publishes a G2 band at all, so a broker's dataset is the ceiling of the available evidence, which is why nothing in this group is high confidence.
Operating, Average annual kilometres16,000 km a year to 24,000 km a year
Derived proxy, not a measured average. Report 01 publishes no average-annual-kilometres figure anywhere. Section 2.13 gives a typical lease annual km allowance of 16000 to 24000 km per year, which is the only kilometre band in the research, so it stands in as the driving-distance band. A lease allowance is set to cover typical driving rather than to measure it, so this band runs high. Cross-check against report 01 section 2.8's 150 to 250 dollar per month gasoline band, at the same section's 1.70 per litre price: at 16000 km every class consumption figure below lands inside that band, 159 dollars for a sedan to 249 for a pickup, and at the 20000 km midpoint the lighter classes stay inside it while a pickup runs above at 312. That band is not class-specific, so the overrun is expected rather than a contradiction. Source a StatCan or Natural Resources Canada annual vehicle-kilometres figure before any page quotes a driving distance.
Operating, Fuel consumption litres per 100 km, Suv10 L / 100 km
Modelled, not sourced. Same derivation and same caveat as the sedan figure.
Maintenance, Monthly five to ten years$125 a month to $150 a month
Vehicle 5 to 10 years old.
Depreciation, Used vehicle annual rate8% to 16%
Annual value loss for a vehicle that is ALREADY USED, from Canadian Black Book's 2026 Market Preview, published February 2026. Its "Annual Depreciation, 2-6 Year-old Vehicles" chart carries a sixteen-year series of printed bar labels: 2011 -12, 2012 -13, 2013 -13, 2014 -14, 2015 -9, 2016 -12, 2017 -11, 2018 -13, 2019 -13, 2020 -8, 2021 +19, 2022 -9, 2023 -16, 2024 -15, 2025 -10, 2026 forecast -15. The range stored here, 8 to 16 percent, is the full span of that series with 2021 excluded, and 2021 is excluded because it is an APPRECIATION year and not a rate of depreciation at all. The midpoint the engine uses, 12 percent, is close both to the 2011 to 2020 pre-pandemic mean of 12.2 percent and to Canadian Black Book's own 2025 forecast, which its 2025 Market Preview of 2025-02-24 stated as "12% depreciation is expected for two-to-six-year-old vehicles this year". The report's prose gives 15 percent for 2024 and 14.5 percent expected for 2026, slightly different from its own chart labels, and the wider range absorbs both readings. Confidence is medium rather than high: this is a named Canadian valuation authority publishing a dated series, which is the best available, but the values are read off printed chart labels rather than a table, and CBB attributes the recent years to a tariff-driven correction unwinding the elevated pricing that began in 2020 rather than to ordinary ageing. DELIBERATELY NOT SEGMENTED. The same report says the current decline "is expected to be more widespread across light truck segments, while passenger cars are anticipated to follow the same trend but to a lesser degree", which is the opposite of what depreciation.segmentMultiplier says: those multipliers are derived from five-year NEW-vehicle losses and make trucks the slowest depreciating segment. Until a segmented Canadian used-market series exists, one flat rate is the honest reading.
Lender ratios, Total debt service maximum44%
CMHC maximum. Housing plus all other debt divided by gross income. Car loans and leases count at the full monthly payment, which is what makes the mortgage-impact figure derivable.
Mortgage, Amortization months300 months
Modelled, not sourced. 25 years is the conventional Canadian mortgage amortization for qualification math. Report 01 publishes no amortization period. Paired with the derived qualifying rate to set the annuity factor behind the mortgage-capacity figure.
Mortgage, Conventional five year fixed rate6.09%
Bank of Canada series V80691335, labelled "Conventional mortgage: 5-year" and described by the publisher as "the interest rate for a 5-year conventional mortgage offered by chartered banks in Canada". The weekly reading was 6.09 percent on 2026-08-26 and unchanged over the five preceding weeks. This is the CONTRACT rate the qualifying rate is derived from. IT IS A POSTED RATE, WHICH IS THE CAVEAT THAT HAS TO RIDE WITH IT. A posted rate is what a chartered bank advertises, and it sits well above what most borrowers actually sign: discounted and broker-sourced contract rates are routinely one to two points lower, and the Bank publishes no series for those. So the greater-of rule applied to this number returns a qualifying rate higher than the one a real borrower would be tested at, which makes the mortgage capacity a car payment costs a FLOOR rather than an estimate: a borrower on a discounted rate loses more capacity than the figure shows, never less. The direction is deliberate, because understating the cost of a car payment is the failure this product exists to correct. Replace with the reader's own contract rate the moment a field collects one; nothing in ScenarioInput does today. Replaces the 2026-09 vintage's single modelled qualifyingRate figure of 0.0525, which was the stress-test floor used directly as an annuity rate and named no source.
Mortgage, Qualifying rate stress points2%
The two percentage points added to the contract rate under the OSFI minimum qualifying rate for uninsured mortgages, which the publisher states as "the greater of the mortgage contract rate plus 2% or 5.25%". Page last updated 2026-01-29.
Mortgage, Minimum qualifying rate floor5.25%
The other half of the same greater-of rule: the 5.25 percent floor that binds only when the contract rate is below 3.25 percent. It has not bound since 2022 and does not bind at the current 6.09 percent conventional rate, but it is held as a figure rather than as a constant because it is the published rule and a falling rate environment would make it bind again.
Verdict thresholds, Easy maximum income share10%
Total transportation cost at or below 10 percent of gross income is 20/4/10 compliant. Report 01 section 2.15 is blunt that with total ownership cost near 1373 dollars a month the 10 percent rule is out of reach for all but the wealthiest Canadians, so present it as a guardrail rather than a gate.
Financing, Bank of canada average auto loan rate6.57%
Bank of Canada average car loan rate, April 2026. Held in the mid 6 percent range through early 2026, roughly 6.37 to 6.72 percent month to month. Use as a market anchor, never as a quoted rate.
Lease, Residual share 36 months sedan or electric48% to 55.00%
Report 01 section 2.13 gives 36 month residual benchmarks of 48 to 55 percent for sedans and for electric vehicles without rebate support. The research names no band for SUVs, crossovers or minivans, so they take this lower one rather than the truck band. That is the cautious direction: a lower residual raises the modelled lease payment, so the comparison never flatters a lease on a body style the research does not cover. Same sourcing caveat as the truck and hybrid band.
Lease, Annual kilometre allowance16,000 km a year to 24,000 km a year
Report 01 section 2.13 puts a typical annual kilometre allowance at 16000 to 24000 km a year. The same band backs operating.averageAnnualKilometres, for the reason recorded there: it is the only kilometre band anywhere in the research. A contract states its own allowance and its own excess kilometre rate, and the research publishes no benchmark rate at all, so the comparison prices an overage only when a reader supplies the rate from their own quote.
Operating, Home charging share45% to 80%
Derived, not sourced. The share of charging done at home rather than at public DC fast chargers. Solved as the band that reproduces report 01 section 2.8's 50 to 80 dollars per month EV charging figure, using the same section's time-of-use rates averaged across on, mid and off peak, its public rate of 0.35 to 0.55 per kWh, its 16 kWh per 100 km consumption and the averageAnnualKilometres midpoint. An 80 percent home share lands at 49.32 dollars a month, a hair under the 50 dollar floor, and a 45 percent home share at 80.24. This is a user-facing slider in the product, so the figure only sets the starting position.
Electricity, Public dc fast charging per kWh$0.45 per kWh to $0.75 per kWh
Up from [0.35, 0.55] in the 2026-08 vintage. Confirmed twice via search-indexed content directly attributed to this URL, but other current sources give materially different ranges (0.30-0.65, 0.37-0.80), so confidence is downgraded to low pending a direct fetch of the live page, which this audit environment could not reach.
Operating, Electric vehicle consumption kWh per 100 km16 kWh / 100 km
Stated in report 01 section 2.8 as the mid-size EV reference: 16 kWh per 100 km, which at the off-peak rate of 0.076 per kWh gives the 1.22 dollars per 100 km the same section quotes. That internal arithmetic checks out exactly, which is why this is the one figure in this group above low confidence. It is still a single mid-size reference and does not vary by vehicle class.
Figures marked low confidence are modelled from the research rather than taken from a single source, and each one says what would replace it. Estimates, not advice.
Insurance, fuel and maintenance are the same car in all three columns, so they are left out here and carried by the all-in monthly figure on the calculator. Two things follow. A lender and a lessor both require comprehensive coverage a cash buyer may decline, so the cash column is understated by whatever that coverage costs. And a lease disposition fee is not modelled, because the research publishes no figure for one.
Estimates, not advice. Figures dated 2026-09-01, every source shown. No number here is a quote, an approval, or a substitute for what a lender, a lessor or a dealer will put in writing.