Lease vs Buy a Car: The Real Cost Over 3 and 6 Years
On a $35,000 car, the lease payment is about $532 a month vs $694 to buy. What each really costs once you count the car you keep.
By the MoneyBackKit team · Updated October 27, 2026 · 6 min read
Leasing gives you a lower monthly payment and a new car every few years. Buying costs more each month but leaves you with a car you own. Which is cheaper depends on how long you keep it. Here's a side-by-side on a $35,000 car.
The example
$35,000 car, $3,000 down, 7% sales tax, $1,000 in fees, 6.5% rate. The lease is 36 months with the car worth 58% of its price at the end (the "residual"). The loan is 60 months.
| Lease (36 months) | Buy (60-month loan) | |
|---|---|---|
| Monthly payment | $532 | $694 |
| Paid after 3 years (incl. down payment) | $22,150 | $27,970 |
| What you have after 3 years | Nothing (return the car) | A car worth about $20,300, with $15,571 still owed |
| Real cost of 3 years | $22,150 | $23,241 |
Over three years, the lease costs about $22,150 and buying costs about $23,241 once you count the value of the car you'd keep. The lease is close to or cheaper than buying at three years in this example. The bigger difference comes later: keep the bought car six years, until it's worth about 40% of its price, and the whole six years cost about $30,617. Leasing for six years means two leases, around $44,299.
When leasing makes sense
- You want a new car every 2–3 years and always under warranty.
- You drive within the mileage limit (often 10,000–15,000 miles a year; extra miles cost money at the end).
- You use the car for business and your tax adviser says lease payments are deductible for you.
When buying makes sense
- You keep cars for 5+ years: once the loan is paid off, you drive without a payment.
- You drive a lot, or want to modify the car.
- You want to avoid end-of-lease charges for wear, damage and extra miles.
Negotiate either way
- In a lease, the price of the car (cap cost) is negotiable, just like when buying.
- Ask for the money factor and multiply by 2400 to see the interest rate it really is.
- Compare a loan from your bank or credit union with the dealer's offer before you sign.