Lease vs Buy: The Long-Term Cost Structure
Evergreen explainer. Educational estimates only. U.S.-focused; varies by state and by country.
Quick answer: Focus on total cost (payment + insurance + fuel + maintenance + depreciation + fees), not just the sticker price.
Key points
- Leasing is mainly a payment-and-fees product; buying is mainly a depreciation-and-equity product.
- Leases can reduce short-term cash outlay, but you usually give up long-term equity.
- Lease return condition rules can create surprise costs if you plan poorly.
- The “best” choice depends on mileage, how long you keep vehicles, and risk tolerance.
Example range
Many households drive about 12,000 miles per year (≈19,300 km). Your costs will change mainly with mileage, insurance, and repairs.
FAQ
Are leases always cheaper monthly?
Often yes, but the total cost can be higher once fees, taxes, and repeated cycles are included.
Is it bad to buy a car at lease end?
Not necessarily. If the buyout price is below market value and you want to keep the vehicle, it can be a strong move.