The lease vs. buy decision impacts your finances for years. While leasing offers lower monthly payments, buying builds equity. Let's run the numbers to find your best option.
Lease vs. Buy at a Glance
| Factor | Lease | Buy |
|---|---|---|
| Monthly payment | Lower | Higher |
| Ownership | Never own | Build equity |
| Mileage limits | Yes (10-15K/year) | None |
| Wear & tear | Fees at lease-end | Your problem, your benefit |
| Customization | Not allowed | Your choice |
| Long-term cost | Higher if repeating | Lower over time |
Real Cost Comparison Example
2025 Honda CR-V EX ($34,000 MSRP)
Lease Option (36 months)
- Down payment: $2,000
- Monthly payment: $389
- Total lease cost: $16,004
- At end: Return car, start over
Buy Option (60-month loan at 6%)
- Down payment: $5,000
- Monthly payment: $560
- Total paid after 36 months: $25,160
- Remaining loan balance: $12,600
- Car's value after 3 years: ~$22,000
- Equity at 3 years: ~$9,400
5-Year Comparison
Leasing twice (two 3-year leases): $32,008 spent, no car owned
Buying and keeping: $38,600 spent, own a car worth ~$17,000
Net cost of buying: $21,600
Savings by buying: ~$10,400
When Leasing Makes Sense
- You want a new car every 2-3 years
- You drive under 12,000 miles/year
- You prefer always having warranty coverage
- You don't want maintenance surprises
- Business use provides tax advantages
When Buying Makes Sense
- You plan to keep cars 5+ years
- You drive more than 15,000 miles/year
- You want to build equity toward your next car
- You prefer freedom to customize or sell anytime
- Long-term cost matters more than monthly payment
The Hidden Costs of Leasing
- Excess mileage: $0.15-0.30 per mile over limit
- Wear and tear: Dings, stains can cost hundreds
- Early termination: Expensive penalties
- Gap insurance: Often required/recommended
The Bottom Line
Buying wins financially if you keep cars long-term. Leasing can make sense if you value always driving new with lower monthly costs—just know you're paying for that convenience.
