Short answer
Do not compare a lease payment with a loan payment. Loan principal builds ownership. Economic purchase cost is mainly depreciation, interest and fees; lease cost includes every contract payment.
Important variables
- Upfront and delivery payments
- Expected resale value at an equal horizon
- Finance rate and remaining balance
- Return and excess-mileage cost
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Worked example
A €42,900 car leased for 36 months at €399 with €3,500 upfront and €1,190 delivery already costs €19,054 before return. If bought and sold for €27,000, depreciation is €15,900 plus interest and fees.
Break-even: What changes the result?
A higher resale value favours buying. A larger upfront payment or return cost weakens leasing. The resale crossover shows where the ranking changes.
Common mistakes
- Counting all principal as cost
- Ignoring the upfront lease payment
- Comparing unequal horizons
- Treating resale value as a forecast
Terms in this guide
Sources & assumptions
- RATIOXA — Methodology and formulas (2026-08-17)
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