Lease vs buy: which actually costs less?

The short version: a lease is cheaper every month, and a purchase is cheaper every decade. When you lease, you pay for the depreciation the car suffers while you have it, plus finance charges. When you buy, you pay for the entire car — but the payments stop, and what's left is yours.

For scale, across the 2,461 manufacturer lease offers we're tracking this month, the median advertised payment is $449/month, and the cheapest is $149/month. A loan payment on the same car, at the same term, is typically substantially higher — you're financing the whole vehicle, not part of it.

Leasing usually wins if…

• You want the lowest monthly payment for a given car. This is the single strongest argument, and it's why a $50,000 car can carry a $400 lease payment.
• You replace your car every few years anyway. 74% of the offers we track run 36 months, which matches how often a lot of people change cars regardless.
• You don't want to think about depreciation or resale. The residual value is the manufacturer's problem, not yours — you hand the keys back.
• You want to be under warranty the whole time. A 36-month lease generally ends before the factory warranty does.

Buying usually wins if…

• You keep cars a long time. The years after a loan is paid off are the cheapest motoring you will ever do. A lease has no equivalent.
• You drive a lot. Leases cap annual mileage, and going over is charged per mile at the end. High-mileage drivers routinely erase the monthly saving this way.
• You're hard on cars. Wear-and-tear charges at lease end are real, and what counts as "excess" isn't your call.
• You want to modify it, or just own it. A leased car isn't yours.

The comparison people get wrong

Comparing a lease payment to a loan payment is not comparing like with like — the lease is cheaper by construction, because it's buying you less. The useful comparison is total cost over the years you'll actually keep the car, including what you could sell it for at the end if you bought.

The other frequent error is treating due-at-signing as a down payment. On a lease it isn't equity — it's prepaid rent. If the car is written off in month two, that money is gone. This is the reason experienced lessees minimise the amount due at signing even when it raises the monthly figure.

A reasonable way to decide

Work out how long you'll keep the car. Under four years, and leasing is usually competitive or better. Beyond six or seven, buying almost always wins on total cost. In between, it genuinely depends on the specific deal — which is worth checking rather than assuming, since manufacturer lease programs change monthly and vary by region.

If you're leaning toward leasing, the current numbers are the place to start: every lease deal we track, or by segment — SUVs (median $469/mo across 1530 offers), sedans, hybrids and EVs.

If the mechanics are the unfamiliar part — how car leasing actually works covers where the monthly number comes from.