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Lease vs Buy
The monthly payment is the wrong comparison. This runs both routes over the same term and settles it on net cost — what you spent, minus what you still own.
The deal
Same car, same price, same term — the only difference is how you pay for it.
Sets the depreciation curve. Model pages use that car's own curve instead.
Financing terms
Lease rate and loan rate are set independently — they rarely match.
≈ 6.48% APR
Over 36 months
Buying costs less
by $14,957
Leasing
You own nothing at the end
Buying
Tax and fees financed into the loan
What you get back on sale, after paying off the loan
Buying becomes the sustained lower-cost option at month 14. The lead changes 2 times before the final advantage holds through month 36.
Cumulative cost over the term
Buying is shown net of the equity you would recover by selling the car that month.
- Leasing — cash spent
- Buying — cash spent minus equity
What the comparison actually measures
Leasing and buying are not two prices for the same thing. Leasing rents the depreciation. Buying purchases the whole car and then sells back whatever is left. To compare them fairly you have to value what you hold at the end.
The lease side
Cash due at signing plus every monthly payment. At the end the car goes back and your position is zero. Simple, predictable, and completely exposed to whatever residual the bank set at the start.
The purchase side
Cash at purchase plus every loan payment, minus the equity you hold at the end — the car's market value less the remaining loan balance. That equity is real money you recover by selling, and ignoring it is the most common error in these comparisons.
When each one wins
Lease when
- The model depreciates hard — luxury EVs and full-size sedans especially.
- The manufacturer is subsidizing the money factor or inflating the residual.
- You change cars every two to three years regardless.
- You want the warranty to cover the entire time you hold the car.
- The car is a business expense where lease treatment is favorable.
Buy when
- The model holds value unusually well, or trades above sticker.
- You drive more than the mileage allowance a lease would permit.
- You intend to modify the car in any meaningful way.
- You plan to keep it beyond the lease term — the longer, the better.
- The lease money factor is not subsidized and reflects a full market rate.
Frequently asked questions
- Is it better to lease or buy an exotic car?
- It depends almost entirely on how fast the specific model depreciates. Cars with weak resale — large luxury sedans, most luxury EVs, and heavily discounted flagships — are usually cheaper to lease, because the leasing bank absorbs a loss you would otherwise take yourself. Cars with unusually strong retention, such as the Mercedes G63 or a well-specified Porsche 911, favor buying, because you keep the value the lease would have handed back.
- How does the break-even point work?
- Buying starts at a disadvantage because you pay sales tax on the full purchase price and absorb the steepest depreciation in the first year. As the loan balance falls faster than the car's value, equity builds. The break-even month is the point where the cash you have spent minus the equity you hold drops below what leasing would have cost by that same month.
- Does the comparison account for sales tax correctly?
- Yes, and the difference is significant. Most states tax only the monthly payment on a lease, while a purchase is taxed on the entire vehicle price up front. On a $250,000 car at 7% that gap is over $17,000 in the buyer's first month, which is a large part of why leasing looks cheaper early on.
- What if I plan to keep the car for a decade?
- Long ownership almost always favors buying. Once the loan is paid off you are only carrying running costs, while a lease resets to a new payment every three years indefinitely. The comparison here runs over the lease term because that is the decision most people are actually making, but the longer your horizon, the stronger the case for buying.
- Why is my lease payment lower but the total cost higher?
- A lease payment only covers the depreciation during the term plus interest, so it is naturally lower than a loan payment covering the whole car. But at the end of a lease you hold nothing, while a buyer holds an asset. Comparing monthly payments alone will always flatter the lease. Compare net cost instead.
Keep going
Run the underlying numbers separately.