Is it cheaper to lease or buy a car? Over ten years, the math is not close. One recent side-by-side followed two drivers for a decade: the perpetual leaser, signing a new $600-a-month lease every three years, spent $84,000 and owned nothing at the end. The buyer of a $27,000 used car spent about $37,500 all-in and still owned a car worth $7,000. The difference was roughly $46,500. That is the lease-vs-buy debate in one picture: leasing rents you a low payment, buying builds you an asset.
Is it cheaper to lease or buy a car? The 5-year math
Take a $35,000 Honda CR-V, the kind of mainstream car both sides of this debate actually buy. The lease route: $450 a month for 36 months is $16,200, plus roughly $2,000 due at signing, for $18,200. At month 36 you hand the car back and start over, and two more years of leasing add about $12,600. Five-year total: $30,800, and you own nothing. The buy route: $650 a month for 60 months is $39,000 plus $3,000 down, $42,000 total. At month 60 you own a car worth roughly $18,000. Net five-year cost: $24,000. Buying saves about $6,800, and the gap only widens from there.
The pattern behind those numbers: leasing means you pay for the steepest three years of depreciation, over and over, and never collect the asset. Buying means you pay for the whole car once and then drive it for nearly free for years.
The break-even lands around year 4 or 5
Lease-vs-buy calculators that model both paths on the same car keep landing in the same place: buying overtakes leasing around year 4 or 5 of ownership. Hold the car longer than that and buying wins decisively. Over a full ten years, buying a $35,000 car and holding it costs roughly $35,000 to $40,000 total, purchase price plus interest plus maintenance minus residual, versus $48,000 to $55,000 for three consecutive leases with zero residual. That is a 20 to 40 percent gap, and it matches how most Americans actually behave: the average purchased car stays with its owner 8 to 12 years, deep into the territory where buying wins.
When leasing actually wins
Three cases, and they are all real. First, business use: if you can write off the lease payments, the tax math can flip the comparison, though you should run it past a CPA before counting on it. Second, you genuinely want a new car every three years and drive under 12,000 miles a year; then you are buying a lifestyle knowingly, and leasing is the honest way to price it. Third, short-term need: a two-year work contract where buying and reselling would eat you alive in transaction costs.
And the traps: mileage overage at $0.20 to $0.30 a mile adds up fast if you underestimate your driving, big money due at signing quietly inflates the "cheap" monthly number, and leased cars typically need gap insurance baked into the payment. Negotiate the money factor the way you would an interest rate, because that is what it is.
My take
If you keep cars the way most people do, 8 to 12 years, buy and hold. It is not exciting advice, which is why dealers don't give it. The monthly payment is a marketing unit, not a cost measure. If you want a new car every three years forever, lease with your eyes open. Either way, decide based on the 10-year total, not the monthly number on the windshield sticker.
New vs used vs leased: the 5-year scorecard
One more comparison worth running, because "buy" covers two very different purchases. A recent 5-year breakdown followed three buyers of the same Toyota Camry: Alex bought new at $35,000, Ben bought a 3-year-old certified used one at $22,000, Chris leased new at $350 a month with $3,000 down. After five years, counting payments, interest, insurance, maintenance, and fuel, then subtracting resale value: Alex's new car cost about $47,000 net, Ben's used car about $38,000 net, and Chris's lease $47,380 net with zero asset at the end. The used buyer won by roughly $9,000. Depreciation is the biggest cost in every scenario, and the used buyer simply lets someone else pay the steepest part of it.
The lease terms dealers hope you won't decode
If you do lease, read three numbers before the monthly payment. The money factor is the interest rate in disguise; multiply it by 2,400 to get the APR. A money factor of 0.0025 is 6% APR, and dealers mark it up quietly. The residual is what the dealer says the car will be worth at lease end; a high residual lowers your payment but also means you are paying mostly for depreciation you will never recover. And due at signing is not a fee, it is a prepayment that makes the monthly number look smaller than the deal really is. A $3,000 down payment on a 36-month lease is $83 a month of hidden payment. Add it back before you compare anything.
Frequently asked questions
Is leasing a car cheaper than buying?
On monthly payment, usually yes. On total cost over a decade, no: buying and holding the same car is typically 20 to 40 percent cheaper, and you end up owning an asset worth real money instead of nothing.
At what point does buying become cheaper than leasing?
Around year 4 or 5 of ownership. Before that, leasing's lower payments can look better on cash flow; after that, the buyer pulls ahead and the gap keeps widening every year the car is paid off.
Is leasing ever the better choice?
Yes: business use with a tax deduction, a genuinely short-term need, or you knowingly want a new car every three years and stay under the mileage cap. The mistake is leasing by default instead of by decision.
What is the average car lease payment in 2026?
Roughly $586 to $659 a month for a new car, per Experian and Edmunds data cited in recent comparisons. That is the number to beat when you run your own buy-vs-lease math.