Lease vs. Buy a Car: Which Is Better in 2026?
A comprehensive comparison to help you decide whether leasing or buying makes more financial sense for your situation.
Quick Answer: Lease if you want lower monthly payments, drive under 12,000 miles/year, and like getting a new car every 3 years. Buy if you drive a lot, want to customize your car, or plan to keep it long-term to build equity.
Leasing vs. Buying at a Glance
Leasing
- Lower monthly payments
- Always under warranty
- New car every 2-3 years
- Lower down payment
- Mileage restrictions
- No ownership equity
- Wear-and-tear fees
Buying
- Build equity/ownership
- No mileage limits
- Can modify/customize
- Eventually payment-free
- Higher monthly payments
- Repair costs after warranty
- Higher down payment
Cost Comparison: Real Numbers
Let's compare a $35,000 car over 6 years:
Leasing (2 x 3-year leases)
Monthly payment: $350 × 72 months = $25,200
Down payments (2): $2,000 × 2 = $4,000
Disposition fees: $300 × 2 = $600
Total spent: $29,800
Car owned at end: $0
Buying (5-year loan + 1 year owned)
Monthly payment: $550 × 60 months = $33,000
Down payment: $5,000
Year 6 (no payment): $0
Total spent: $38,000
Car value at end: ~$15,000
* Net cost of buying: $38,000 - $15,000 = $23,000 (actually cheaper long-term)
When Leasing Makes Sense
- You drive under 12,000-15,000 miles per year - Excess mileage fees can be $0.15-$0.30 per mile
- You want the latest safety technology - Always have current driver assistance features
- You're a business owner - Lease payments may be tax deductible
- You hate dealing with repairs - Always under warranty coverage
- You like driving new cars - Fresh vehicle every 2-3 years
When Buying Makes Sense
- You drive 15,000+ miles per year - No mileage penalties
- You keep cars for 7+ years - Years of payment-free driving
- You want to customize - Add aftermarket parts, accessories, or modifications
- You have kids or pets - No worries about interior wear-and-tear fees
- You want to build equity - Car becomes an asset you can sell or trade
Hidden Lease Costs to Watch For
- Acquisition fee: $395-$995 charged at lease start
- Disposition fee: $300-$500 charged when you return the car
- Excess mileage: $0.15-$0.30 per mile over your limit
- Wear and tear: Charges for dents, stains, or excessive tire wear
- Early termination: Can cost thousands if you need to end the lease early
Not Sure What's Right for You?
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