Leasing vs Buying a Car: Which is Cheaper in 2025?

Leasing wins on monthly payment. Buying wins on long-term cost. Here's the math that decides which is right for you.

The core trade-off

When you lease, you pay only for the depreciation you use during the lease term, plus a finance charge. When you buy, you pay for the whole car but keep the equity. Lower payments now versus ownership later — that's the entire decision.

A real comparison: $40,000 car over 3 years

	Lease	Buy (60-mo loan)
Monthly payment	~$390	~$720
Paid over 3 years	$14,000	$25,900
You own at the end	Nothing	Car worth ~$22,000
Net cost	$17,800	~$10,000

Over the same period, buying costs less net once you account for the car's residual value — but only if you keep the car past the loan.

When leasing makes sense

• You want a new car every 2–3 years and value the latest tech and warranty coverage.
• You drive under the mileage cap (usually 10–12k/year).
• You can write off a business vehicle.

When buying makes sense

• You keep cars 5+ years (the longer you hold, the more buying wins).
• You drive a lot — no mileage penalties.
• You want an asset you can sell whenever you like.

Lease the depreciation, or buy the asset. If you keep cars a long time, ownership almost always wins.