Financing · 9 min read
Leasing puts you in a new car every 3 years with lower payments. Buying builds equity but costs more monthly. The right choice depends on how you actually use cars — not on what the dealer prefers (they love leases).
Updated October 2026 · By the CARC research team
Leasing a $40,000 car for 3 years typically costs $15,000–$20,000 in payments with nothing to show at the end. Buying the same car and keeping it 9 years spreads the cost dramatically lower per year.
Leasing wins on monthly cash flow and always driving a new, warrantied car. Buying wins on total cost for anyone who keeps cars more than 5–6 years.
Standard leases allow 10,000–12,000 miles per year. Excess mileage costs $0.15–$0.30 per mile — drive 15,000 miles a year on a 12,000-mile lease and you owe $900–$1,350 at turn-in, per year.
Be brutally honest about your driving. If you exceed the limit, buying is almost always cheaper.
Business owners who can deduct lease payments, people who want a new car every 2–3 years and hate maintenance surprises, and EV shoppers who want to avoid battery-depreciation risk.
Anyone who drives a lot, keeps cars long-term, wants to modify their car, or simply wants the lowest lifetime cost per mile. Buying a 2–3 year old car and keeping it a decade is the cheapest way to drive.
Negotiate the vehicle's selling price (capitalized cost) just like a purchase — most people don't, and dealers count on it.
Watch the money factor (the lease's interest rate — multiply by 2,400 to get the APR equivalent) and refuse large down payments on leases.
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