Leasing vs buying - which is actually the better financial decision?

Automotive

Getting conflicting advice from everyone. My dad says leasing is throwing money away, my coworker says shes leased for 10 years and loves it. I drive about 12k miles a year, want a reliable mid-size SUV, planning to keep it 5+ years if I buy. Financially speaking, which actually makes more sense? Not talking about what I "want" but purely numbers wise.

Stephanie White

3 Answers

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Purely financially, buying and holding long-term wins almost every time. Heres why:

Leasing:

/month for 3 years = ,400

After 3 years you have: nothing

Repeat forever

10 years of leasing = ,000+, still own nothing

Buying (example):

k car, /month for 5 years = k paid

After 5 years you have: a paid off car worth ~k

Drive it 3 more years payment-free

10 years total cost: ~k, maybe k maintenance

Leasing makes sense if:

Business expense/tax write-off

You NEED newest safety features always

You literally cant handle any maintenance surprises

For you specifically:
12k miles/year is fine for leases. But wanting to keep 5+ years = buying wins easily. Buy a 2-3 year old certified pre-owned, let someone else eat the depreciation, drive it for 8-10 years. Cheapest way to own a car.

Emily Johnson

Leased for 6 years before doing the math. Switched to buying a 2-year-old certified preowned and driving it for 8 years. Saved literally tens of thousands. Leasing is basically paying for the most expensive years of a cars life.

Sarah Taylor

Leasing makes sense for some people though - if you NEED a reliable new car for work, if repairs stress you out, or if its a business expense. For most regular people buying wins though.