Should You Lease or Buy a Car?
🇩🇪 Diesen Artikel auf Deutsch lesenBuying is usually cheaper in the long run because you keep the car after the loan is paid off. Leasing offers lower monthly payments and a new car every two to four years, but comes with mileage limits, wear-and-tear charges and no ownership. Leasing can make sense if you drive little, want the latest technology or use the car for business.
The monthly payment on a lease often looks much lower than a loan for the same car. But the comparison only makes sense over the full time you plan to drive.
How leasing works
You pay for the car's expected depreciation during the lease, plus a finance charge and fees. At the end you return the car — or buy it for the residual value set in the contract.
- Mileage limits: typically 10,000–15,000 miles a year; extra miles often cost $0.15–$0.30 each.
- Money factor: the lease's interest rate. Multiply it by 2,400 to get an approximate APR.
- Wear and tear: damage beyond normal use is charged at turn-in.
How buying works
With a loan, your payments are higher, but once it is paid off you own the car and drive payment-free. Cars that last 10–15 years spread the purchase price over many more years.
Loan Payment CalculatorMonthly payment and total interestTry the calculator →Side by side
| Lease | Buy | |
|---|---|---|
| Monthly payment | Lower | Higher |
| Long-term cost | Higher (always paying) | Lower if you keep the car |
| Mileage | Limited | Unlimited |
| Customization | Not allowed | Allowed |
| Ownership | None | Yes |
When leasing makes sense
- You drive under 12,000 miles a year.
- You want a new car with full warranty every few years.
- You use the car for business and can deduct lease payments (ask a tax professional).
- You lease an EV and want to avoid the risk of rapid depreciation.
Frequently asked questions
Can I end a lease early?
Usually only with significant fees. Lease transfer services or a dealer buyout are sometimes cheaper options.
Is gap insurance included in a lease?
Many leases include gap coverage, but not all. Check the contract — without it, a totaled car can leave you owing money.