Buy vs Lease Vehicle

Monthly lease payments are lower, but you never own the vehicle. Buying costs more upfront but builds equity. Over 5+ years, buying is usually cheaper overall.

When you like changing vehicles every 2-3 years, drive under 12,000 miles annually, want lower monthly payments, and prefer not to deal with depreciation risk.

Lease when you want a new car every 2-4 years, prefer fixed monthly costs, and drive under 12,000 miles/year. Leasing avoids depreciation risk -- new cars lose 30-50% of value in the first 3 years, which is the biggest cost of car ownership.

Average US car lease is $400-$600/month for a mid-range vehicle. Buying the same car on an auto loan costs $500-$800/month but you own the asset. Over 6 years, buying costs $45,000-$60,000 total while leasing costs $48,000-$72,000 with two vehicles but always driving a newer, warrantied car.

Mileage penalties ($0.15-$0.30 per excess mile), damage charges at return, no ownership equity, early termination fees (50-100% of remaining payments), and you are locked into payments with no asset to sell if circumstances change.

Annual mileage (high = buy), desired ownership period (short = lease), cash flow preference (fixed = lease), tax position (business vehicles have different deduction implications), and whether you value always driving a newer vehicle.

Most standard leases allow 10,000 to 12,000 miles per year with excess mileage charges of $0.15 to $0.30 per mile according to Edmunds data. Drivers averaging over 15,000 miles per year typically save $3,000 to $6,000 over 3 years by buying instead of leasing due to those overage penalties.

Yes, electricity costs roughly $0.04-$0.05 per mile vs $0.12-$0.16 for gas.

The average US car costs $8,000-$12,000 per year to own, including fuel ($1,500-$2,500), insurance ($1,200-$2,000), maintenance ($500-$1,000), registration and fees ($150-$500), state inspection ($20-$50), and depreciation ($3,000-$5,000).

The calculator compares costs.

10 criteria: mileage stated, service history, inspection status, number of owners, condition description, price justification, photos, clean title/Carfax status, test drive offered, and contact details.

A good auto loan APR in the US is 4-6% for new cars and 6-9% for used cars.