Lease versus finance versus cash in Ontario
Over 36 months, on a $12,938 car
Money factor and residual, in plain wordsPaying cash wins by $95.
Counting what the car is still worth at the end, paying cash costs $8,897 over 36 months, against $8,992 for financing. That gap is $95.
Leasing lands exactly on financing at a residual of 61.9%, 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 68.2% 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
$309/mo
9.64% APR60 months7.29% to 11.99% for your credit
Cash at signing
$0
Paid by month 36
$11,109
Still owed at month 36
$6,711
Car worth at month 36Why being underwater matters
$8,828
Equity you keep
$2,117
Cost over 36 months
$8,992
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
$286/mo incl. HST
9.64% APR36 months9.64% from the money factor on the quote
Before Ontario HSTMoney factor and residual, in plain words
$253
9.64% APR36 months9.64% from the money factor on the quote
HST over the 36 months
$1,184
Residual at month 36
$6,663, 51.5%
Kilometre allowance
20,000 km a year
Equity you keep
None, you hand it back
Cost over 36 months
$10,293
You drive inside this allowance, so no excess kilometre charge applies.
Paying cash
$14,645
on the day of sale
Tax and fees inside that
$1,707
Forgone earnings at 6.57%
$3,080
Car worth at month 36Why being underwater matters
$8,828
Equity you keep
$8,828
Cost over 36 months
$8,897
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 as you make it, which comes to $1,184 over 36 months. Buy the same car and the tax is $1,707, due at the sale and usually financed along with everything else. 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 $8,828 against $6,711 still owed, so you hold $2,117. The lease ends with nothing: you hand the keys back. Buying it out at the $6,663 residual would be $2,165 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 this34 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 2026-09, compiled 2026-08-30.
Verdict thresholds, Manageable maximum income share15%
10 to 15 percent of gross income is realistic for most Canadians.
Federal luxury tax, Threshold CAD$100,000
Applies to vehicles above 100000 dollars, manufactured after 2018, seating 10 or fewer, gross vehicle weight rating at or below 3856 kg, four or more wheels. Confirmed still in force for 2026. Charged before HST, so HST compounds on top of the luxury tax.
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.
Fees, Ontario tire stewardship CAD$20 to $30
Charged per vehicle at a dealer. Report 01 section 2.1 gives the band without attributing it to a single URL, so confidence is low. Under OMVIC all-in pricing every other dealer fee, freight, PDI, admin, air tax and green levy, must already sit inside the advertised price.
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$2,483 a year
Up from the [2231, 2400] band in the 2026-08 vintage, which spanned two disagreeing sources (report 01 section 2.6 and report 03 section 2.4). ThinkInsure has since republished its table with a single current figure: "$2,483 (May 31, 2025 - May 31, 2026), up 9.67% from 2024." Confirmed via two independent search queries with matching quotes. Verified through search-indexed content rather than a direct fetch, which this audit environment could not reach; a direct-fetch re-check is recommended. The Mississauga companion figure in this file, which cited the same ratehub.ca source as part of the old Toronto band, was not re-verified this cycle and is unaffected by this update.
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.
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.
Fuel, Ontario regular gasoline per litre$1.70 a litre
Ontario regular gasoline, late August 2026. Ontario averaged roughly 1.84 per litre February to May 2026 and Toronto roughly 1.85 May to August 2026, so treat this as a user-adjustable default. Report 01 section 2.16 asks for a weekly refresh; the cadence vocabulary tightens to weekly when a live price feed replaces the manual figure.
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, Year one rate20% to 30%
Up from [0.15, 0.30] in the 2026-08 vintage; low end moved from 15 percent to 20 percent. Source now states "a new car generally depreciates between 20% to 30% in the first year", confirmed via two independent search queries with matching quotes. Verified through search-indexed content rather than a direct fetch, which this audit environment could not reach; a direct-fetch re-check is recommended. Luxury vehicles and weak-resale nameplates run 25 to 35 percent in year one per the prior vintage; unable to re-confirm that detail this cycle.
Depreciation, Segment multiplier, Unsegmented1
Fallback for sedans, SUVs, crossovers and minivans. Report 01 section 2.10 publishes no separate five-year figure for those classes, so they track the all-vehicle average until one is sourced. The value is 1 by definition rather than by measurement.
Depreciation, Five year rate all vehicles41.80%
Five-year industry average, improved 3.8 points against 2025. This is the baseline every segment multiplier is measured against.
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, Qualifying rate5.25%
Modelled, not sourced. Report 01 section 2.15 supplies the GDS and TDS mechanics and the 100000 dollar income worked example but names no mortgage rate, and no report in docs/research names one. 5.25 percent is the long-standing Canadian minimum qualifying rate floor for the mortgage stress test and is used here only as the annuity rate that converts a monthly payment into a principal amount. It is a stress-test style rate deliberately, because the product's claim is what a lender would qualify the buyer for, not what they would pay. Replace with a sourced OSFI B-20 minimum qualifying rate or a posted lender rate before any page quotes a dollar capacity.
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 qualifyingRate to set the annuity factor behind the mortgage-capacity figure.
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.
Electric vehicle affordability program, Final transaction value cap CAD$50,000
Eligibility is keyed to final transaction value at or below 50000 dollars, not to MSRP as under iZEV. That change matters to the model because options and dealer-installed accessories now count. Canadian-made EVs carry no transaction-value restriction, and the boundary of that exemption is part of the outstanding Transport Canada confirmation.
Electric vehicle affordability program, Battery electric maximum CAD$5,000
EVAP, the successor to iZEV, announced 16 February 2026 and running 31 March 2026 to 31 March 2031. Up to 5000 dollars for battery-electric and hydrogen fuel-cell vehicles, applied at point of sale. Confidence is low because report 01 section 5 item 6 lists Transport Canada primary-source confirmation of the eligible-vehicle list, the dealer point-of-sale mechanics and the Canadian-made exemption boundary as outstanding. Confirm before the EV module ships, or fall back to a verify-eligibility band.
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.
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, Time of use on peak per kWh$0.203 per kWh
Ontario Energy Board Regulated Price Plan rate, effective 2025-11-01 through 2026-10-31. Up from 0.158 in the 2026-08 vintage, roughly 28 percent higher. Corroborated by neobanc.com/articles/ontario-electricity-rates and by half a dozen local utility companies republishing the same OEB release (Oshawa Power, Tillsonburg Hydro, Algoma Power, ERTH Power, Niagara Peninsula Energy, Canadian Niagara Power). Verified through search-indexed content rather than a direct fetch of oeb.ca, which this audit environment could not reach; a direct-fetch re-check is recommended.
Electricity, Time of use mid peak per kWh$0.157 per kWh
Ontario Energy Board Regulated Price Plan rate, effective 2025-11-01 through 2026-10-31. Up from 0.122 in the 2026-08 vintage, roughly 29 percent higher. Same corroboration and same fetch caveat as timeOfUseOnPeakPerKwh.
Electricity, Time of use off peak per kWh$0.098 per kWh
Ontario Energy Board Regulated Price Plan rate, effective 2025-11-01 through 2026-10-31. Up from 0.076 in the 2026-08 vintage, roughly 29 percent higher. Same corroboration and same fetch caveat as timeOfUseOnPeakPerKwh.
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.
Depreciation, Segment multiplier, Electric1.37
Derived, not separately sourced. 0.572 divided by 0.418, rounded to three decimals.
Depreciation, Five year rate by segment, Electric57.20%
EV five-year depreciation, materially worse than the 41.8 percent all-vehicle average. An honest EV comparison nets the EVAP rebate and charging savings against this and against often higher insurance.
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 2026-08-30, 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.