Lease vs Loan: The Real Cost Difference
A lease is a rental of depreciation. A loan finances the purchase. Here's the cost math.
Updated 2026-06-16 · Reviewed monthly
| Factor | Lease | Auto Loan |
|---|---|---|
| Pays for | Depreciation + finance charge | Full price + interest |
| Monthly | Lower | Higher |
| Total cost (3 years) | Roughly equal to loan minus equity | Roughly equal to lease plus equity |
Lease — Pros
- • Lower payment
- • Always new
Cons
- • No equity
- • Mileage limits
Auto Loan — Pros
- • Build equity
- • No restrictions
Cons
- • More upfront
- • Higher payment
If you'd sell after 3 years anyway, lease. If you keep cars 5+ years, loan.