Should You Lease or Buy a Car?
Compare total cost of leasing vs buying over your ownership period. See which option saves more money.
Lease vs Buy: The Real Math
Buying is almost always cheaper long-term because you build equity and eventually own the car outright. A $35,000 car with a 60-month loan costs approximately $40,000 total — but after 6 years, you still own a car worth $15,000-18,000. Leasing the same car for 6 years (two 36-month leases) costs approximately $27,000-30,000 but you own nothing at the end. The break-even is typically around year 4-5.
When Leasing Makes Sense
Lease if: You want a new car every 2-3 years, drive under 12,000 miles/year, value lower monthly payments, or need a car for business (lease payments are tax-deductible). Buy if: You keep cars 5+ years, drive high miles, want no payment after payoff, or want to customize. For most people keeping a car 5+ years, buying saves $5,000-15,000 over the ownership period.
The cheapest car ownership strategy: buy a 2-3 year old certified pre-owned vehicle with cash or a short loan, drive it for 8-10 years, and repeat. You skip the steepest depreciation (30-40% in years 1-3) and have no payments for 5-7 years. Average cost: $3,000-4,000/year including depreciation, vs $6,000-8,000/year for perpetual leasing.
