Car Lease vs Buy: Which Saves You More Money?
Published Apr 14, 2026 Β· 6 min read
Leasing gives you a lower monthly payment. Buying builds equity. But which is actually cheaper over time? The answer depends on how long you keep vehicles and how many miles you drive.
6-Year Cost Comparison
$35,000 vehicle, 12,000 miles/year:
| Lease (2 Γ 3 yr) | Buy (6 years) | |
|---|---|---|
| Monthly payment | $400 | $620 (72 mo, 6%) |
| Total payments | $28,800 | $44,640 |
| Car value at end | $0 | $14,000 |
| Net cost | $28,800 | $30,640 |
| Maintenance | Under warranty | $2,000-4,000 |
Over 6 years the net cost is close. But if you keep the car for 10 years, buying wins decisively β you drive payment-free for years 7-10.
When Leasing Wins
- You want a new car every 2-3 years
- You drive under 12,000 miles/year
- You need business tax deductions for vehicle expenses
- You don't want to deal with selling or trading in
- The manufacturer has strong lease incentives (subsidized rates)
When Buying Wins
- You keep cars 5+ years (payment-free years are pure savings)
- You drive more than 12,000 miles/year (lease mileage penalties: $0.15-0.30/mile)
- You customize or modify your vehicle
- You want no restrictions on wear-and-tear
- You're building equity for a future trade-in
The Hidden Costs of Leasing
- Mileage overage: Exceeding 36,000 miles in 3 years at $0.25/mile = $2,500 penalty for just 24,000 extra miles
- Wear charges: Any dent, scratch, or stain beyond "normal" costs $200-500+
- Early termination: Breaking a lease early can cost the remaining payments plus fees
- No equity: You'll always have a car payment β forever
The Optimal Strategy
Buy a 2-3 year old certified pre-owned car, finance for 48-60 months max, and keep it for 8-10 years total. You get years of payment-free driving, skip peak depreciation, and have a reliable vehicle with most of its lifespan ahead.
Try it: Use our Lease vs Buy Calculator to compare total costs for your specific situation.