Lease vs Buy a Car in 2026: Which Costs Less?

Lease vs buy: the monthly numbers

Leasing means paying to use a car for a set time, usually a few years, and then handing it back. Buying means you pay for the whole car, often with a loan, and own it at the end. As the FTC puts it, with a lease “you’re paying to drive the car, not to buy it.”

Here is how the average monthly payments compared in the second quarter of 2026.

Source: Experian, Q2 2026. Lease payment is our calculation from Experian’s reported $148 gap between new loan and lease payments.

That is in line with late 2025, when Experian data cited by LendingTree put the average new lease payment at $613 in Q4 2025, up 1.5% from a year earlier.

Leases made up 23.75% of new vehicle financing in Q2 2026, down slightly from 24.04% a year earlier, according to Experian. The average new car loan ran 69.5 months, so many buyers are paying for close to six years.

Credit matters less for lease payments than you might expect. Bankrate reports Q2 2026 lease payments of about $619 for subprime borrowers and $622 for super-prime borrowers, while new loan payments ranged from $805 to $741.

Lease vs buy: the total cost

The lower lease payment is only part of the story. When a loan is paid off, you own a car with real value. When a lease ends, you have nothing to sell.

Bankrate compared both options on a 2025 Toyota Camry with an MSRP of about $35,000.

Source: Bankrate example, Sep 2026. Totals and net cost are our calculation, using Bankrate’s projected end-of-lease value for the buyer’s car. Excludes taxes, fees, insurance and the cost of selling.

In this example, buying costs about $5,472 less over three years, if you could sell the car for its projected value (our calculation). The buyer needs much more cash up front and pays about $323 more a month, though. And if you keep the car after the loan ends, the payments stop entirely, which is where buying pulls further ahead.

Try your own numbers in our car loan calculator to see what a loan would cost on the car you want.

When leasing can make sense

• You want the lowest payment for a new car. The monthly savings averaged $148 in Q2 2026.
• You like a new car every few years. A lease ends in a set time and you simply return the car.
• You want warranty coverage. Bankrate notes the factory warranty typically covers the first three years or 36,000 miles, which often matches the lease.
• You do not want to deal with resale. Depreciation and trade-in value are the leasing company’s problem.
• You drive a predictable, moderate number of miles. Bankrate says the average U.S. driver covers about 12,200 miles a year, which fits most lease caps.

When buying usually wins

• You keep cars a long time. Once the loan is paid off, you own the car outright.
• You drive a lot. There are no mileage limits or overage fees.
• You are hard on cars. Owners do not pay wear-and-tear charges at the end.
• You might need to get out early. An owner can sell at any time, while ending a lease early is expensive, per Bankrate.

The catch is depreciation. Bankrate says a new car loses value steeply in the first year and roughly half its value within five years, and once the warranty ends, repairs are on you.

Lease costs people overlook

The FTC and Bankrate both point out costs that are easy to miss:

• Mileage limits. Bankrate says caps are commonly 12,000 to 15,000 miles a year. The FTC says most standard leases allow 15,000 or less, and exceeding the limit usually means a fee when you return the car.
• Excess wear and damage. You pay for damage beyond normal wear and for any missing equipment.
• Early termination. Ending a lease early may bring a substantial charge, per the FTC.
• Upfront and signing costs. Bankrate lists acquisition or drive-off fees, taxes, title and licensing, dealer documentation fees and prep charges.
• Insurance requirements. The FTC notes you must carry insurance that meets the leasing company’s standards, which usually means full coverage. See our car insurance cost guide for typical rates.

So which costs less?

For most people who keep a car past the loan term, buying costs less in total. In Bankrate’s Camry example, the gap was about $5,472 over just three years. Leasing costs less per month and can make sense if you value a new car, lower payments and predictable costs more than long-term savings.

Whichever you choose, the payment is only one line in your budget. Our guide to the true cost of owning a car adds fuel, insurance, maintenance and depreciation, and the electric vs gas car cost comparison helps if you are also deciding what to drive.

This is general information, not financial advice. Compare real quotes for the exact car you want before you sign.

See how we research every number on our method page, or browse more car costs.