Is it cheaper to lease or buy a car?

Over a single lease term, leasing is usually cheaper per month. Over the long run, buying and keeping the car is typically thousands cheaper, because a lease is a permanent payment while a paid-off car keeps its value and ends the payment.

When does leasing make sense?

When you want a new car every few years, drive low and predictable miles, or can write off the lease for business. If you trade cars frequently anyway, leasing can be competitive.

Why does buying win over 10 years?

Because the lease never ends, you keep paying every few years, while a buyer pays off the loan and then drives a paid-for car that still has resale value. Owning an asset plus ending the payment is what creates the long-run gap.

Cars · Honest math, no agenda

Lease vs buy a car: cheaper now, expensive forever?

Leasing feels cheaper, and over the lease itself it usually is, about $250 a month less than buying the same car in this example. But extend the timeline to ten years and the choice flips completely: buying wins by tens of thousands.

What a lease payment hides

When you lease, you only pay for the part of the car you use up (depreciation over the term) plus fees, which is why the monthly is lower, but at the end you own nothing. When you buy, the payment is higher because you are buying the whole car, and at the end you own an asset worth real money. The honest question is not "which is cheaper this month?" but "which is cheaper per year of driving, once you count what you own at the end?"

A worked example

A $38,000 car: lease at $450/month (plus fees) vs buy with $4,000 down, a 7% loan over 60 months:

Over the 3-year lease term: lease net cost $32,115 (own $0) vs buy net cost $32,875, roughly a wash, lease about $253/mo lighter on cash flow
Over 10 years: leasing (4 leases) $109,180, still owning nothing
Over 10 years: buying and keeping ~$73,797 net after resale, buying wins by more than $30,000

Both are true at once. Over one lease, leasing is cheaper and easier on cash flow. But a lease is a permanent payment, you never stop. Buy and keep the car past the loan, and your cost per month collapses while you drive a paid-off asset.

Compare your real numbers →Free Lease vs Buy calculator. No sign-up. See the short-term and the 10-year cost side by side.

The honest caveat

Leasing genuinely fits some people, if you must have a new car every few years, drive low predictable miles, or write it off for business, the math changes. Watch the mileage cap the calculator makes you enter (driving 13,000 on a 12,000 limit costs extra). And buying only wins long-term if you actually keep the car past the loan, if you trade every three years anyway, you are basically leasing with extra steps.

Figures from TheSharpDollar's Lease vs Buy calculator using the sample scenario. Your result depends on your real lease terms, price, and how long you keep the car.