Auto Lease Buyout Calculator Canada

What the lease buyout calculator does

The calculator prices the cost of keeping the car you have been leasing and sets it against the cost of handing it back. It applies your province’s combined sales tax to the buyout price, counts any lease payments you still owe, adds the fees a return would trigger to the return side, and reports whether buying out leaves you ahead or behind.

It covers two cases. An end-of-term buyout, where you still owe the remaining monthly payments and then pay the residual. Or an early buyout, where the lessor quotes a payoff that folds the remaining payments into the purchase price and the contract closes immediately.

The numbers on your lease contract

Every Canadian lease contract has a residual value, sometimes called the purchase option price or buyout amount. It is the lessor’s forecast, made at the start, of what the vehicle would be worth at the end of the term. When used vehicle prices run higher than expected, the residual can sit well below what the car is worth and the buyout becomes a bargain. When prices soften, the opposite happens.

Next to the residual you will usually find a purchase option fee, an administrative charge for exercising the buyout, and a disposition fee, charged instead if you return the car. Only one of the two applies, so avoiding the disposition fee counts as a saving on the buyout side.

Sales tax on a buyout

Buying out a lease is a vehicle purchase, so sales tax applies to the buyout price. The rate depends on where you register the car, not where the lessor is. Provinces that use the harmonized sales tax charge a single combined rate. Provinces with a separate provincial sales tax charge the 5% GST plus their own. Quebec charges GST plus QST. Alberta and the territories charge GST alone.

On a five-figure buyout the difference is large: the same residual can carry three times as much tax in one province as in another, enough on its own to change the answer. The calculator stores the provincial rate table as a maintained parameter, so a rate change flows straight through.

You have already paid tax on every monthly lease payment, and you pay tax again on the residual when you buy the car. The payments and the residual are separate purchases, so this is not double taxation in the technical sense, but the total tax on a leased-then-bought vehicle is higher than on the same car bought outright at the start.

Comparing the two paths

A fair comparison counts what you end up holding as well as what you spend. Return the car and you pay the remaining payments, the disposition fee and any excess charges, and own nothing. Buy it and you pay the remaining payments, the buyout price and the tax, and own a vehicle worth its market value.

The net advantage figure does that arithmetic: the cost you avoid by not returning the car, plus the value of the car you keep, minus the total cost of buying out. A positive number means buying out is cheaper in cash terms. The equity figure answers a narrower question: whether the car is worth more or less than it costs to own it outright today.

With the default inputs (an Ontario lease with a $19,500 residual, a $350 option fee, 12 payments of $520 left, a $450 disposition fee and a market value of $23,000), the buyout price is $19,850, 13% HST adds $2,580.50, and the total cost of buying out including the remaining payments is $28,670.50. Returning the car would cost $6,690. The net advantage of buying is about $1,020 and the equity is about $570.

Excess kilometres and wear charges

Lease contracts set a kilometre allowance and a standard for acceptable wear. Go over either and the lessor bills you when the car comes back. Those charges disappear if you buy the vehicle, because there is no return inspection. For a driver several thousand kilometres over, or facing a bill for curbed alloys and a cracked windshield, this alone can swing the decision.

Enter the total you expect to be charged in the excess charges field. It is added to the cost of returning the car.

Financing the buyout

Lease buyout loans are widely available from banks, credit unions and manufacturers’ finance arms, though rates are usually a little higher than for a new car loan because the vehicle is older. Enter a rate and a term and the calculator amortizes the financed amount, the buyout price plus sales tax, and shows the monthly payment and total interest.

Compare that payment with what a replacement lease would cost. A buyout payment close to a new lease payment, which ends with you owning the car outright, is usually the better deal, especially on a vehicle whose history you already know.

What the tool leaves out

The calculator does not value future maintenance, warranty coverage, insurance differences between leasing and owning, or the tax treatment of a vehicle used for business. It assumes the buyout price is taxed at the standard provincial rate, the normal treatment for a buyout from a lessor. Private sales between individuals are taxed differently in several provinces and are not modelled.

Registration, safety inspection and transfer fees vary by province and are not included; add them to the buyout side for a complete figure.

Reading the result

If the net advantage is comfortably positive and the car has been reliable, buying out is usually the simple choice. If it is close to zero, the decision comes down to things the arithmetic cannot capture: how much you like the car, its service history, and what else is available at that price.

This calculator provides an estimate for information only and is not financial advice.

About This Lease Buyout Calculator

Use this lease buyout calculator to get an instant, accurate estimate. The figures follow official CRA guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.