Leasing vs buying a car: which is cheaper?
Leasing means renting the car for a few years; buying (usually financing) means owning it outright once the loan is paid. Leasing wins on monthly cost; buying wins over the long run.
| Lease | Buy | |
|---|---|---|
| Monthly payment | Lower | Higher |
| Ownership | None — return it | Yes — keep it |
| Mileage limits | Yes (fees if over) | None |
| Long-run cost | Higher (perpetual payments) | Lower (paid off, then free) |
| Best for | New car every few years | Keeping cars a long time |
Why buying is usually cheaper long-term
A financed car becomes payment-free once the loan ends, and you keep driving it for years at no monthly cost. Leasing keeps you in a perpetual payment cycle. The longer you keep a bought car, the more the math favors buying — estimate the loan in the Auto Loan calculator.
When leasing makes sense
If you want a new car every 2–3 years, value warranty coverage and predictable costs, or use the car for business, leasing’s lower payment and hassle-free turn-in can be worth the premium. Just mind the mileage limits and wear charges.
The verdict
Buy (and keep it) for the lowest long-run cost — a paid-off car is the cheapest car. Lease if you prize a new car every few years and lower payments, and you stay under the mileage cap. Run the purchase numbers in the Auto Loan calculator.
Frequently asked questions
- Is leasing cheaper than buying?
- Cheaper monthly, but more expensive over the long run because you never stop paying. Buying and keeping the car past the loan is cheapest overall.
- What are mileage limits?
- Leases cap annual miles (often 10–15k); exceeding them triggers per-mile fees when you return the car.
- Can I buy the car after leasing?
- Usually yes, at a preset buyout price — but financing a purchase from the start is typically cheaper than leasing and then buying.
Settle it with your numbers
Free, in-browser calculators for everything above.