Leasing vs Buying: Which is Right for You?
"Should I lease or buy?" It's one of the most common questions people ask when getting a new car. The answer depends on how you drive, what you value, and your financial situation.
Let's break down both options so you can make the right choice.
Leasing: The Basics
When you lease, you're essentially renting the car for a set period (typically 2-3 years). You make monthly payments for the right to use it, then return it at the end.
Pros of Leasing
Lower Monthly Payments Lease payments are typically 30-40% lower than loan payments for the same car. You're only paying for the depreciation during your lease term, not the full vehicle price.
Drive a Newer Car Leasing lets you drive a new car every few years with the latest safety features, technology, and styling.
Warranty Coverage Most leases fall within the manufacturer's warranty period. Repairs are usually covered, reducing unexpected maintenance costs.
Lower Upfront Costs Leases often require less money down than purchasing, making it easier to get into a nicer vehicle.
No Resale Hassle At lease end, you return the car and walk away. No negotiating trade-in values or selling privately.
Cons of Leasing
Mileage Limits Most leases cap you at 10,000-15,000 miles per year. Going over means paying $0.15-$0.30 per excess mile.
No Ownership You never own the car. When the lease ends, you have nothing to show for your payments.
Wear and Tear Charges Excessive wear, dents, or interior damage can result in fees at turn-in.
Always Have a Payment If you lease continuously, you'll always have a car payment. Ownership eventually means payment-free driving.
Buying: The Basics
When you buy (finance or cash), you own the vehicle outright once it's paid off. You can keep it as long as you want.
Pros of Buying
Ownership The car is yours. Drive it for 10 years, modify it, sell it whenever you want.
No Mileage Restrictions Drive as much as you want without worrying about overage fees.
Eventual Payment Freedom Once the loan is paid off, you have no monthly payment. The average car loan is 5-6 years; the average car lasts 12+ years.
Build Equity Your car has trade-in or resale value. This can offset the cost of your next vehicle.
Cons of Buying
Higher Monthly Payments Loan payments are higher than lease payments for the same vehicle.
Depreciation Risk Cars lose value quickly—about 20% in year one. You bear this loss as the owner.
Maintenance Costs Once the warranty expires, repairs come out of your pocket.
Upfront Costs Buying typically requires a larger down payment.
The Math: A Real Comparison
Let's compare leasing vs buying a $35,000 car over 6 years:
Leasing (two 3-year leases):
Monthly payment: ~$400
Total payments: $28,800
Value at end: $0 (you return both cars)
Net cost: $28,800
Buying (6-year loan):
Monthly payment: ~$550
Total payments: $39,600
Value at end: ~$12,000
Net cost: $27,600
In this scenario, buying is slightly cheaper—but you drove older cars and dealt with maintenance after warranty. Leasing cost more but gave you newer cars with full warranty coverage.
Neither is universally "better." It depends on what you value.
Which is Right for You?
Leasing might be better if you:
Want lower monthly payments
Like driving a new car every few years
Drive less than 12,000 miles per year
Don't want to deal with selling or major repairs
Use the car for business (potential tax benefits)
Buying might be better if you:
Drive a lot (15,000+ miles per year)
Keep cars for 7+ years
Want to eventually have no car payment
Customize or modify your vehicles
Don't mind dealing with maintenance and repairs
The Bottom Line
There's no wrong answer—only the right answer for you. Consider your driving habits, financial goals, and preferences.
If you do decide to lease, make sure you track your mileage so you don't get hit with surprise overage fees at the end.
🚗 Lease or Buy Quiz
Answer 4 questions to find your best option
How many miles do you drive per year?
How often do you want a new car?
What matters more to you?
How do you feel about car maintenance?
You should lease!
Based on your answers, leasing aligns better with your driving habits and preferences.