The short answer
Leasing usually costs less each month and keeps you in a newer car under warranty. Buying usually costs less over the long run if you keep the car for many years after it's paid off. Which one is better for you comes down to how you drive, how long you keep cars and how you like to spend your money.
I've spent years on every side of the car business, in sales, finance and management, and I've seen both work well for the right person. Here's how they compare.
Monthly cost
When you lease, you pay for the part of the car's value you use during the lease, plus a financing charge and fees. When you buy, you pay for the whole car. That's why a lease payment is usually noticeably lower than a loan payment on the same car over the same term.
A lower payment can mean more car for the same budget, or the same car with more money left over each month.
Long-term cost
If you buy a car and keep it for eight or ten years, you'll have several years with no car payment. Over that full stretch, buying is usually cheaper than leasing new cars back to back.
The catch is that those later years come with an older car: more repairs, new tires, brakes and eventually major parts, without a factory warranty. Leasing trades that long-term saving for predictability.
Miles
Leases come with a yearly mileage allowance, commonly 7,500 to 15,000 miles. Go over and you pay a per-mile charge at the end. If you drive a lot, you can buy extra miles upfront, which is usually cheaper than paying overage later. If you regularly drive 20,000 miles or more a year, buying often makes more sense.
Repairs and warranty
Most leases are 36 months or shorter, which lines up with most manufacturers' basic warranty. That means most repairs during a lease are covered, apart from routine maintenance and tires. When you buy, you're on your own for repairs once the warranty ends.
Equity and flexibility
- Buying builds equity. Once the loan is paid off, the car is yours to keep, sell or trade.
- Leasing lets you hand the car back at the end and pick something new, without having to sell it yourself. If the car turns out to be worth more than your buyout price, you can still use that equity on a trade-in.
Leases also have a set end date, and getting out early can be expensive. Our guide to early lease termination explains your options if plans change.
Business use
If you use the car for business, a lease can be a simple way to keep a predictable monthly cost and stay in a current vehicle. How it's treated for taxes depends on your situation, so check with your accountant. We also work with contractors and small fleets; see business and fleet leasing.
A quick checklist
Leasing probably fits you if:
- You like driving a newer car every two to four years
- You drive a predictable number of miles each year
- You'd rather have a lower monthly payment and fewer repair surprises
- You don't want to deal with selling a car later
Buying probably fits you if:
- You keep cars for many years
- You drive a lot of miles
- You want no car payment eventually
- You plan to customize the car or put it through heavy use
Not sure? Compare real numbers
The best way to decide is to see both options on the car you actually want. Browse this month's lease specials, or ask us to price the car you have in mind.
Tell us the car and how many miles you drive, and we'll show you what the lease really costs, with every number in writing. Call +1 (267) 216-6659 or use the quote form. We deliver anywhere in PA, NJ and DE for free.