Should you buy or lease a car?

This is probably one of the most debated topics when it comes to buying a car. People argue about it constantly, but honestly, the decision is usually pretty straightforward.

It’s pretty simple in most cases, if you plan to keep a car longer than five years, buying is the better financial move. The longer you own the car after it’s paid off, the more the numbers work in your favor.

But not everyone values the same things.

If you like driving a new car every 2–3 years, always want the latest technology, or prefer staying under warranty, leasing may fit your lifestyle better. You’re paying a premium for convenience, predictability, and always having something newer in the driveway. But this comes at a higher cost.

It really comes down to priorities.

If your goal is minimizing the total cost of ownership, buying and holding the car for as long as possible will always win financially. The math is hard to argue with. Even if maintenance costs rise later (which they will), it’s usually still far cheaper than restarting another monthly payment every few years. And if reliability is a concern, you can always purchase an extended warranty.

On the other hand, some people simply enjoy having a new car regularly and are comfortable paying more for that experience. There’s nothing wrong with that. One of my favorite sayings from the podcast Rich Habits is: “Personal finance is personal.”

The key is understanding the tradeoff.

A leased car often keeps you in a permanent payment cycle. Buying gives you a path to eventually having no car payment at all. And that’s where things start to change financially.

Think about it this way: once your car is paid off, that same monthly payment can start working for you instead of against you. Investing even a few hundred dollars a month (car payment) into an ETF or other long-term investment over several years can make a meaningful difference in your financial future.

Cars are depreciating assets. The goal should usually be to minimize how much of your income disappears into something losing value every year.

That doesn’t mean you need to drive an old beater forever. It simply means understanding that the best financial car decision is usually the one that keeps you out of endless payments and allows you to redirect that money into appreciating assets over time.

Personally, I try to keep my vehicles for around 10 years. I typically finance them for five years (60 months), or however I can secure the lowest interest rate possible.

This mindset also changes how I negotiate when buying a car. Instead of focusing on the monthly payment, I focus on the total out-the-door cost of the vehicle. Dealers love to shift buyers toward monthly payment conversations because it makes expensive cars feel affordable. But the real number that matters is the total cost you’re committing to.

I’ll discuss that more in a future post.