Lease vs Buy
Lease vs Buy: Which Is Right for You?
A clear, math-first comparison of leasing versus financing a new vehicle — the trade-offs, the hidden costs of each path, and when one clearly beats the other.
The One-Line Summary
It Comes Down to Payment vs Equity
Leasing minimizes your monthly payment and locks you into a fixed depreciation window. Financing maximizes long-term equity and gives you ownership. Neither is universally better — it depends on you.
Quick Comparison
When Each Path Usually Wins
Leasing Usually Wins When…
You want a lower monthly payment, drive predictable annual miles, like a new car every 2–3 years, or can deduct payments for business use.
Financing Usually Wins When…
You keep cars long-term, drive high mileage, want to build equity, or plan to own free-and-clear after the loan is paid off.
The Total-Cost-of-Ownership Lens
A lease payment looks lower than a loan payment because you only pay for depreciation during the term — not the entire vehicle.
But over a 6–8 year horizon, financing and keeping the car often costs less per mile. The right answer depends on how long you actually keep vehicles.
What to Watch For
The Fine Print That Moves the Math
- Money factor markup on leases
- Mileage overage penalties
- Disposition and acquisition fees
- California monthly lease tax treatment
- Negative equity rolled into a new loan
- Gap coverage and early-termination costs
Not Sure Which Way to Go?
We’ll run the numbers for your exact situation and tell you honestly which path saves you more.