Same car, both ways
Lease vs buy, over 36 months
We ran one car, the Meridian S40, through both routes using sample figures. Here is where each one lands at the three year mark.
- Lease, net at 36 mo
- -$12,899
- Buy, net at 36 mo
- -$23,286
- Difference
- $10,387
The comparison, line by line
Meridian S40 Select at a $30,200 negotiated price. Lease at $289 a month for 36 months with $2,495 due at signing. Purchase with 10% down on a 72 month loan at 7.4%. All figures are samples.
| At month 36 | Leasing | Buying | Note |
|---|---|---|---|
| Cash on delivery day | $2,495 | $6,290 | 10% down plus tax and fees on the purchase |
| Monthly payment | $289 | $561 | 72 month loan at 7.4% on the same car |
| Paid across 36 months | $10,404 | $20,196 | Payments only, excluding day one |
| Cash out after 36 months | $12,899 | $26,486 | Everything paid to that point |
| What you own at month 36 | Nothing | A car worth about $17,900 | Estimated trade-in value, sample figure |
| Still owed at month 36 | $0 | About $14,700 | 36 payments left on a 72 month loan |
| Net position | -$12,899 | -$23,286 | Cash out, less equity, plus remaining debt |
| Repair exposure | None, inside warranty | Years four to six are yours | The expensive years arrive after the lease would have ended |
Cash on delivery day
- Leasing
- $2,495
- Buying
- $6,290
10% down plus tax and fees on the purchase
Monthly payment
- Leasing
- $289
- Buying
- $561
72 month loan at 7.4% on the same car
Paid across 36 months
- Leasing
- $10,404
- Buying
- $20,196
Payments only, excluding day one
Cash out after 36 months
- Leasing
- $12,899
- Buying
- $26,486
Everything paid to that point
What you own at month 36
- Leasing
- Nothing
- Buying
- A car worth about $17,900
Estimated trade-in value, sample figure
Still owed at month 36
- Leasing
- $0
- Buying
- About $14,700
36 payments left on a 72 month loan
Net position
- Leasing
- -$12,899
- Buying
- -$23,286
Cash out, less equity, plus remaining debt
Repair exposure
- Leasing
- None, inside warranty
- Buying
- Years four to six are yours
The expensive years arrive after the lease would have ended
Illustrative only. Loan rates, insurance, residual values and trade-in prices all move. Run your own numbers in the lease calculator and talk to a tax advisor about any business treatment.
Which one suits you
Leasing suits you if
- You want a new car every two to four years
- You drive a predictable, moderate number of miles
- You would rather not carry resale risk
- You want repairs covered by the factory for the whole term
- Cash on delivery day matters more than cost over ten years
- You are trying an electric car for the first time
Buying suits you if
- You keep cars for eight years or more
- You drive well over 15,000 miles a year
- You want to modify the car
- You have irregular income and want to own an asset outright
- You are comfortable budgeting for out-of-warranty repairs
- You want no monthly payment after the loan clears
If most of that list is you, we will say so on the phone. We would rather lose a lease than sell you the wrong product.
Half the people who call us should probably buy. Telling them that is the reason the other half come back in three years.
Lease versus buy, answered
The four questions that come up every time we run this comparison with someone.
All common questionsOver ten or more years with the same car, buying usually wins on total cost. Over three to six years with a new car each cycle, the gap narrows sharply and often reverses once depreciation and out-of-warranty repairs are counted honestly. The horizon you are planning for decides the answer, not the product.
It is real, but it is smaller than people expect in the first three years because that is when depreciation is steepest. Our comparison above counts it: the purchase column still ends behind at month 36, because the loan balance is larger than the equity.
Yes, and it is a genuinely good option when the used market is strong. The buyout is the residual fixed on day one plus a purchase fee. We check the market against your buyout six months before the lease ends and tell you which way the maths points.
Usually not for personal use above 18,000 miles a year, because the mileage allowance gets expensive and the residual drops. Commercial leases are different: we write allowances up to 25,000 miles a year for business customers where the tax treatment changes the calculation.
Call (201) 555-0157 with anything not covered here.
Talk it through with a person
Fifteen minutes on the phone and you will know which way the maths points for your situation.
Soft credit check first. Offers are samples, subject to credit approval.