Find out if leasing, rather than buying, might be a better deal for you By Keith Barry Shopping for a new car means deciding between leasing and buying. In general, you’ll have a lower monthly payment if you lease, but you’ll pay less in the long run if you finance your new car—and you’ll save even more if you pay for the whole thing in cash. But the decision isn’t all about cost. Leasing and buying offer unique benefits and drawbacks depending on your lifestyle and preferences. Would you enjoy getting a new car every three years for a predictable monthly payment without worrying about out-of-warranty repairs or the hassle of selling or trading it in? If so, you probably should consider leasing rather than buying. But if you plan to keep your car for a long time or expect to put a lot of miles on it, you’ll probably be better off buying. With that in mind, we have real-world examples of lease deals offered by automakers and exclusive Consumer Reports survey data to help you decide whether leasing or buying makes more sense for you this year. When You Should Lease You don’t want to deal with surprise repairs or typical maintenance costs. "Leases are rarely longer than the term of a manufacturer warranty, and many leases also offer free maintenance for at least the first two years," says John Ibbotson, CR’s manager of auto testing. As a result, your cost of ownership is very predictable. Leasing is also a way to avoid uncertainty around resale value. You’re interested in a luxury car. Automakers often discount the cost of leasing a luxury car to attract new buyers to a brand. It can bring the monthly payment in line with what it would cost to finance a less-pricey vehicle, says Tom Libby, an industry analyst at the consulting firm S&P Global Mobility. But be aware that specific options and trims aren’t always available on a discounted lease deal. You want a car with the latest features. "New cars often have the latest safety equipment and better crash protection than older models," says Jennifer Stockburger, operations manager at CR’s Auto Test Center. "If you go from lease to lease, you’ll always have a late-model car with the most current safety features." When You Should Buy In the situations that follow, buying—either financing or purchasing a vehicle outright—makes more sense. You drive a lot or put a lot of wear and tear on your car. Most leases cap how many miles you can drive—usually 10,000 to 15,000 per year—and will charge you 10 to 30 cents for every mile you go over your limit. For many people, that’s not enough mileage. Leased cars also have to be returned in good condition as part of the contract, so if you have a messy pet or tend to attract dings and dents, you’re better off buying. You plan to keep the car for a long time. You’ll have no monthly payments after your car is paid off, but it will still have resale value. By contrast, you’re left with nothing when a lease is up. "Are you then prepared to go into another lease with another down payment and potentially higher monthly payments if you don’t put a lot down?" asks Melinda Zabritski, senior director of the financial solutions team at Experian Automotive. Your needs may change in a year or two. "It’s hard to get out of a lease before its term is up," says Gabe Shenhar, associate director of the CR Auto Test Center. Buying makes more sense if you think your needs may change—if, say, you expect to need a larger car or you may have to drive more miles than a lease may allow. Leasing vs. Buying: Cost Comparison This chart compares costs for a 10,000-mile, three-year lease on a 2025 Honda CR-V SUV and purchasing and financing the same vehicle. Our numbers include estimated resale value after three years, assuming you put the same amount of money down at the start. In this example, Honda discounted the vehicle cost by more than $3,000 for lessees and cut the interest rate to 2.9 percent for buyers with excellent credit—typical of current incentives and terms. Note that lease deals might not apply to all trim levels and options. In addition, the deals will differ if your credit score isn’t great. If you plan to keep the car longer than three years or if the resale value of the CR-V drops, your calculations might also change. 2025 Honda CR-V LX AWD built on Honda's website in Radiant Red Metallic (+$455). Photo: Honda 2025 Honda CR-V LX AWD: $32,995 Lease Buy Down payment $4,399 $4,399 Per month x 36 months $319 $832 Total down + monthly payments $15,883 $34,322 Future resale value $0 $24,600 Total cost $15,833 $9,732 Why It's Smart to Lease an EV According to the data analytics company Experian, over 50 percent of EV drivers chose a lease in 2024, up from 30.7 percent in 2023 and just 9.8 percent in 2022. It’s easy to see why: Lessees can still qualify for a federal tax credit of up to $7,500 without meeting restrictive requirements on where an EV or PHEV was made, how much it cost, or the lessee’s income—all of which apply to purchases. Some automakers also discount leases on EVs and PHEVs to help sell vehicles that meet emissions rules. Leasing an EV makes sense for other reasons, too, says Jake Fisher, CR’s senior director of auto testing. Charging a Ford Mustang Mach-E. Photo: Ford "Prices and rebates on EVs have been fluctuating quite widely, making resale values impossible to predict," he says. "But if you lease an EV that depreciates significantly over the next few years, what it’s worth at the end of the lease isn’t your problem." In addition, EV technology is advancing so rapidly that today’s EVs may end up obsolete in a decade. Battery ranges are growing, charging standards and speeds are changing, and purchase prices are dropping, Fisher says. "If you bought an EV a couple of years ago, it might not even be capable of the fastest kind of fast charging," he says, "whereas the newer vehicles have larger batteries, faster charging, and may cost less." These Cars Might Be Better to Lease If you have your heart set on a fun-to-drive vehicle even though it scores below average in CR’s reliability ratings, leasing may be the way to go, says Steven Elek, program leader for automotive data analytics at CR. "While it still may be a hassle to bring an unreliable vehicle to the dealer for repairs, at least it’s under warranty while you’re driving it," he says. "Then it’s somebody else’s headache when you turn it in at the end of a lease." For example, the Lincoln Nautilus and Rivian R1S and R1T have high road-test and owner satisfaction scores but lower-than-average reliability. It would be better to lease one rather than buy—but only if you can find a good deal that also makes financial sense. CR's Build & Buy Car Buying Service In addition to research and reviews, Consumer Reports offers members access to our Build & Buy Car Buying Service at no additional cost. Through this service, members can compare in-stock vehicles, see what others paid for the car they want, and customize their payments online. Once they find a vehicle they’re interested in, members can get up-front price offers online from local certified dealers. On top of national incentives, Consumer Reports members are eligible for additional incentive offers from select manufacturers through the Build & Buy Car Buying Service. Plus, they can get an instant trade-in value for their current vehicle to use toward their next car purchase. Editor’s Note: This article has been updated since it appeared in the July 2024 issue of Consumer Reports magazine. Consumer Reports is an independent, nonprofit organization that works side by side with consumers to create a fairer, safer, and healthier world. CR does not endorse products or services, and does not accept advertising. Copyright © 2025, Consumer Reports, Inc.
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