Lease vs. Buy: The Real 6-Year Cost Comparison for 2026

Is leasing or buying cheaper over 6 years?

For the average driver covering 12,000 miles a year and holding the same vehicle past the warranty period, buying is meaningfully cheaper over 6 years — roughly $4,000–$8,000 cheaper on a $35,000 vehicle, according to Edmunds 2024 cost-of-ownership data. But that assumes you actually hold the vehicle 6 years. If you trade in every 3 years (the average new-car owner now does, per NADA), the gap collapses to under $1,000.

The right answer depends on three things: how long you plan to keep the car, how many miles you drive, and whether the cash you'd put into the equity build-up has a higher-yield alternative.

This guide breaks down the actual 6-year cost on a $35,000 vehicle under both scenarios, using 2026 lender rate data, current residual values, and Edmunds depreciation curves.

What is the actual monthly cost difference?

The headline number — "lease payment is $150–$250/month lower than the equivalent loan" — is real. But the lease payment only covers the depreciation of the car during the lease term, while the loan payment covers the full cost of the vehicle. So you're not comparing the same thing.

Here's the apples-to-apples view on a 2026 Honda Accord LX ($28,500 MSRP, 7.5% APR loan, 60% residual at 36 months):

So over the LEASE term, the lease is ~$8,700 cheaper. But the buyer ends with a paid-off car worth $10,500 — and the lease buyer ends with nothing.

What is the 6-year total cost?

Extending both scenarios to 6 years — assuming the lease customer leases a second vehicle for years 4–6 — flips the picture:

The buyer also avoids ~$3,500 in lease-end mileage and excess-wear penalties (the average lease return charge per NADA 2024). With those included, buying saves $4,000–$5,500 over 6 years for the average mileage profile.

When does leasing actually make financial sense?

Leasing wins in three specific scenarios:

1. You drive under 10,000 miles/year and trade vehicles every 2–3 years anyway. If your driving pattern matches the lease's mileage cap and your vehicle preference cycles fast, the depreciation-only payment is genuinely cheaper than 6 years of buying + selling.
2. Your car is a tax-deductible business expense. Lease payments are 100% deductible against business income (with some limits); loan interest deductions are smaller and on a depreciating schedule.
3. You want to drive a vehicle you cannot afford to buy outright. A $700/month lease on a $70,000 vehicle is mathematically inferior to a $1,100/month loan on the same car, but it may be the only path to driving that car. If the experience matters more than the dollar math, leasing is the right tool.

When does buying win?

Buying wins for the average American driver — and the gap widens the longer you hold the car. Specifically:

• Drivers covering 13,000+ miles/year — lease mileage overages run $0.15–$0.25/mile, and 3,000 miles over the cap costs $450–$750 at lease end.
• Drivers who hold cars 7+ years — the longer you hold past the loan payoff, the more "free vehicle" months you accumulate.
• Drivers in states with high personal property tax on leased vehicles — VA, NC, KY, MA, CT, and others charge property tax on the full value of a leased vehicle, while loan-owners pay tax on a depreciating book value.
• Drivers with a long-term vehicle preference — every lease return is a forced re-shop. Most car owners overestimate their flexibility appetite.

How does my credit tier change the comparison?

Subprime borrowers (sub-660 FICO) almost always benefit more from leasing because lease "money factor" (the lease equivalent of APR) is set by the captive lender (Honda Finance, Ford Credit, etc.) on a slimmer credit-risk curve. A 640 FICO buyer may face 11–14% APR on a loan but a money factor equivalent to ~8% APR on a lease for the same vehicle. The lease math swings dramatically.

Super-prime borrowers (780+ FICO) see the opposite — their loan APR is competitive with the lease money factor, so the equity-build of buying dominates.

Bottom line

For 80% of drivers (12k+ miles/year, hold vehicle 5+ years, decent credit), buying is $1,800–$5,500 cheaper over 6 years. For the other 20% (low miles, frequent trade-in, business use, subprime credit), leasing can win. Run BOTH scenarios in the auto loan calculator with your real numbers — and don't compare just the monthly payment.

Frequently asked questions

Is leasing throwing money away?

Not necessarily — but it IS paying for depreciation without building equity, which can feel that way at lease-end when you turn the car back in. The same logic applies to renting an apartment vs. buying a home. Whether leasing makes sense depends on your driving pattern, ownership horizon, and whether you'd otherwise trade in every 2-3 years anyway.

Can I buy out my lease at the end?

Yes. Most leases include a guaranteed buyout price written into the contract — typically set at the original residual value. If the car's market value has appreciated above that residual (common 2021-2023 for popular SUVs/trucks), buying out the lease and immediately selling or trading can result in $2,000-$8,000 in instant equity.

Do leases have lower monthly payments than loans?

Yes, almost always — the lease payment covers only the depreciation portion of the vehicle plus interest (called 'money factor' in lease terminology). A typical 36-month lease on a $35,000 vehicle runs $250-$400/month while a 60-month loan on the same car runs $450-$650/month. But you don't own anything at the end of a lease.

Should I lease a car if I drive 15,000 miles a year?

Probably not without paying for extra miles upfront. Standard leases cap at 10,000 or 12,000 miles/year. Going over costs $0.15-$0.25/mile, which adds $375-$625/year at 15,000 miles, or $1,125-$1,875 over a 3-year lease. You can buy additional miles upfront for $0.10-$0.15/mile to avoid the surcharge.

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• auto loan rates — the editor-curated hub page
• car affordability calculator — free calculator
• Private Party vs. Dealer: Which Saves More in 2026?

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