🏠 Should I lease or buy my next car?

Deciding whether to lease or buy your next car is one of the most common financial dilemmas. Over a 9-year period, this calculator compares the cost of perpetual leasing—getting a new 3-year lease back-to-back—against buying one car and driving it for the long haul. Discover exactly how much you could save by owning instead of renting your ride.

The Federal Trade Commission notes that lease payments are typically lower than loan payments because you are only paying for the car's expected depreciation, plus a rent charge, taxes, and fees.

Leasing makes sense if you always want a new car under warranty, have predictable low mileage, or can deduct the vehicle for business use.

The FTC explains that buying a car builds long-term equity, unlike leasing where you must hand the car back unless your agreement lets you buy it.

Buying wins financially if you drive high mileage, plan for long ownership, and look forward to years of being completely payment-free once the loan is paid off.

Why does leasing often win on monthly cash flow but buying wins on long-run equity? When you lease perpetually, you never stop paying for the steepest early years of a vehicle's depreciation.

When you buy and hold for 9 years, you absorb that depreciation once. You eventually enjoy years without a car payment, offset only by maintenance.

To provide a clean baseline, this 9-year comparison simplifies a few realities. It excludes varying state taxes, differing auto insurance rates, and the option to buy out the lease at the end.

It also assumes you never trigger extra penalties. The FTC warns that most standard leases strictly cap mileage at 15,000 miles a year or less, and can impose substantial early-termination fees.

For further related reading, check out:

• Financing or Leasing a Car
• Auto loans | Consumer Financial Protection Bureau