Lease vs Buy in 2026: The Honest Math Behind the Monthly Payment
Leasing wins for low-mileage, short-term drivers who want a new car every few years; buying wins past year five when you stop paying and keep the equity.
What you are actually paying for
When you lease, you pay for the depreciation during your term plus a money factor (lease APR) and fees — you never own the car. When you buy, you pay the full price plus interest, but you keep the asset and build equity. That difference is the whole ballgame.
A $42,000 car, three years in
| Path | Upfront | Monthly | 3-yr total | Equity |
|---|---|---|---|---|
| 36-mo lease | $3,000 | $275 | $9,900 | $0 |
| 60-mo buy | $5,000 | $610 | $21,960 | ~$13k |
When leasing is the smarter play
Lease if you want a new car every 2–3 years, drive under 12,000 miles a year, hate surprise repair bills (you are under warranty), and do not care about equity. Business owners may also write off part of a lease payment more simply than a purchase.
The lease fee pile-up
Beyond the payment, leases stack acquisition fees ($500–$900), disposition fees ($300–$500), excess mileage at $0.15–$0.30 a mile, and wear-and-tear charges. A 5,000-mile overage at $0.25 is $1,250 you did not plan for.
When buying clearly wins
Keep the car past year five and buying almost always wins — you stop writing checks and still have a car worth thousands. High-mileage drivers (15,000+ a year) get crushed by lease overage fees. And if you like to modify or keep a car for a decade, ownership is the only sane path.
Frequently asked questions
Is it cheaper to lease or buy a car in 2026?+
What is the main disadvantage of leasing?+
How does lease mileage affect cost comparison?+
Can I buy my leased car at the end?+
How does credit score affect leasing vs buying?+
Compare the true cost of leasing vs buying a car. See total costs and monthly payments side by side.
Related guides
Lease Residual Value 2026: The Number That Sets Your Payment and Buyout
Residual value is the lessor’s bet on what the car is worth at lease end, usually 55–65% of MSRP for a 3-year lease. A high residual means a lower payment and a cheaper buyout if values hold.
Zero-Down Lease 2026: Convenience at a Real Monthly Premium
A zero-down lease keeps cash in your pocket but raises the monthly payment $35–$50 and costs roughly $1,300–$1,800 more over a 36-month term than a $3,000 down lease.
Lease Excess Mileage Penalties: Avoiding the End-of-Lease Surprise
Excess mileage runs $0.15–$0.30 a mile over your allowance — a 5,000-mile overage at $0.25 is $1,250. Buying miles upfront or transferring the lease is cheaper.