Over three years, leasing is usually the cheaper way to be in a new car, because you pay for the depreciation you use plus a rent charge instead of the whole car. Over eight or ten years, buying almost always wins, because payments eventually stop and you still have a car.
Lease vs buy, side by side
| What to compare | Lease | Buy, with cash or a loan |
|---|---|---|
| Who it fits | New car every two or three years, predictable miles | Long ownership, high miles, or wanting no payment later |
| What you pay for | Depreciation during your term, plus a rent charge | The whole car, plus interest if you finance |
| Monthly payment | Usually lower for the same car | Usually higher for the same car |
| Mileage | Capped by the allowance you buy, charged per mile over | Unlimited, though miles still cost you at resale |
| Changes to the car | Return it the way it left, within normal wear | Wheels, tint, tow hitch, whatever you like |
| At the end | Return it, buy it out, or trade in any equity | You own it, and you can keep driving with no payment |
| Resale risk | Carried by the leasing company through the residual | Carried by you |
| Repairs | Usually inside the factory warranty the whole term | Yours once the warranty runs out |
| Up front cash | First payment, fees and tax, and only what is required | Down payment sized to the loan you want |
| If you drive an EV | Shifts battery and resale uncertainty to the bank | You own the battery and the uncertainty |
No payments on this page. Programs change monthly, and your ZIP, your miles and your credit tier change the result.
Lease if
- You want something new every two or three years and you like being under warranty
- Your yearly mileage is predictable and fits inside an allowance you can buy
- You would rather not deal with selling or trading a car later
- You want the lowest cost of being in a specific new car right now
- You are looking at an electric car and would rather not own the resale risk
- You use the car for business and your accountant prefers a lease
Buy if
- You drive more than about 15,000 miles a year
- You keep cars five years or longer, or until they stop being interesting
- You want to stop making payments at some point
- You tow, haul, modify, or put real wear on a vehicle
- You want to drive a paid off car and bank the difference
- You may move out of state or change your driving a lot mid term
Where people get this decision wrong
They compare monthly payments. A lease payment and a loan payment are not the same product. One rents the first three years of a car, the other buys all of it. Compare total cost across the time you actually plan to keep the car, including what the car is worth to you at the end.
They underestimate their miles. Guessing low on a mileage allowance is the single most expensive mistake on a lease, because the per mile charge at turn in is not a discount. Check the odometer on your last two service records rather than trusting your memory.
They put a lot of cash into a lease. A large cap cost reduction lowers the payment, but if the car is stolen or totaled that money is generally gone, because the insurance payout goes to the leasing company. On a purchase, a down payment is still your equity.
They roll negative equity forward without looking at it. Clearing an old balance across 36 lease payments instead of 72 loan payments changes the payment sharply. Look at both versions with real numbers before you choose.
What about paying cash?
Paying cash removes interest, which is the cleanest version of buying. It is the right answer when you have the money set aside, the car is one you intend to keep, and the manufacturer is not offering a rate low enough to make financing worth it.
Watch for the trade off. Some manufacturer rebates are tied to using the captive lender, so a cash purchase can leave money on the table. Ask which incentives depend on financing, compare the two, and then decide. We run that comparison on the exact car.
Does leasing or buying depend on the car?
Yes, more than most people expect. A model with a high residual and manufacturer lease cash can lease well while a similarly priced model leases badly in the same month, because the lender sets residuals and incentives per model, trim and term.
That is why this page has no sample payment. The honest version is to pick the two or three cars you would be happy with and let us run both a lease and a purchase on each with the current programs. The answer is often obvious once the numbers are side by side.
What a broker does either way
The work is the same for a lease or a purchase: find the exact car, ask several franchised dealers for the same written numbers, and read the paperwork with you before you sign. What changes is which lines matter.
On a lease we watch capitalized cost, money factor, residual, fees and due at signing. On a purchase we watch the selling price, the rate and term the lender approves, the trade, and every add on. Either way you should see each piece separately rather than one blended payment.
Green Light Auto Broker is an autobroker. All new cars arranged for sale are subject to price and availability from the selling franchised new car dealer.
Questions
Is it cheaper to lease or buy a car?
Over three years, leasing is usually the cheaper way to be in a new car, because you pay for the depreciation you use plus a rent charge rather than the whole car. Over eight or ten years, buying is almost always cheaper, because the payments stop and you still own a car.
How many miles can I drive on a lease?
Whatever allowance you buy, commonly 7,500 to 15,000 miles a year, with a per mile charge in the contract for anything over. If you drive more than about 15,000 miles a year, buying usually makes more sense.
Can I buy the car at the end of a lease?
Yes. The residual in your contract is your buyout. If the car is worth more than the buyout, that difference is lease equity, and you can put it toward your next car instead of handing it back.
Does leasing hurt your credit?
No more than a car loan does. A lease reports as an installment account and behaves the same way: paying on time helps, and missing payments hurts.
Should I put money down on a lease?
Usually only what is required. A cap cost reduction lowers the payment, but it is generally lost if the car is stolen or totaled because the insurance payout goes to the leasing company. Compare total cost over the term instead.
Is leasing a good idea for an electric car?
Often, yes. A lease hands the resale risk to the leasing company while battery and charging technology keep moving, and manufacturer lease cash on electric models changes monthly. If you drive high miles, buying can still win.
Should I lease or buy if I still owe money on my current car?
Slow down first. Rolling a balance into a short lease raises the payment sharply because you clear it over fewer months. Read our negative equity guide and look at both versions with real numbers before you decide.
Is leasing better for business use?
It can be, and that is a question for your accountant rather than a broker. What we can do is produce clean paperwork for either structure and show you the full cost of each so your accountant has real numbers to work with.
Related: Leasing vs buying through a broker, Lease terms explained, End of lease options, Trading in a car you still owe on, Negative equity, Which electric cars lease well, Lease by brand, Current deals, Trade in appraisal. Text (714) 471-8775 or get started.
Green Light Auto Broker is an independent licensed California auto broker (CA DMV Autobroker License #72394), not a dealership. This page lists no payments; incentives, availability and credit approval vary.