CarsPrices checked Oct 21, 2026

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

Lease vs buy car costs in 2026: lease payments run about $148 a month less than the $765 average new car loan, but buying usually costs less over time.

Blue car on display in a modern showroom
Photo: Myron Mott / Unsplash
The short answer$148Average monthly savings of a new lease vs a new loan, per Experian

In the lease vs buy car decision, leasing wins on the monthly payment and buying usually wins on total cost. In Q2 2026, the average new car lease payment was $148 a month lower than the $765 average new car loan payment, but in Bankrate's Camry example, buying and then selling after three years cost about $5,500 less than leasing for the same three years (our calculation).

Source: Experian Q2 2026 data via Auto Remarketing (Aug 2026), and Bankrate (Sep 2026).
23.75%Share of new vehicle financing that was leases, Q2 2026, per Experian
12,000-15,000Typical annual mileage limit on a lease, per Bankrate
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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.

Option Average monthly payment
New car loan $765
New car lease ~$617
Used car loan $542

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.

Lease Buy with a loan
Term 36 months 36 months at 6.70% APR
Down payment $1,000 $7,000 (20%)
Monthly payment About $538 About $861
Paid over 3 years $20,368 $37,996
Car’s value at the end Returned About $23,100
Net 3-year cost $20,368 About $14,896

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.

Common questions

Is it cheaper to lease or buy a car?

Leasing is usually cheaper per month, and buying is usually cheaper over the long run. Experian data shows new leases averaged $148 a month less than new loans in Q2 2026, but a buyer keeps the car's value at the end, while a lessee returns it.

What is the average lease payment in 2026?

Based on Experian data, the average new car loan payment was $765 in Q2 2026 and leases ran $148 less, which works out to about $617 a month (our calculation). Bankrate reports Q2 2026 lease payments of about $619 for subprime and $622 for super-prime borrowers.

What happens if I go over the mileage limit on a lease?

You will likely pay an extra fee for each mile over the limit when you return the car. Bankrate says caps are commonly 12,000 to 15,000 miles a year, and the FTC notes that choosing a higher limit usually raises your monthly payment.

Can I get out of a car lease early?

Yes, but it is often expensive. The FTC warns that ending a lease early may trigger a substantial early termination charge, and Bankrate notes that transferring the lease to someone else is usually cheaper.

Sources

Every number above comes from these pages. We list the date each page showed when we checked it.

  1. Auto Remarketing, Experian Sees Refinancing Continue to Ripen in Q2autoremarketing.comAug 27, 2026, Experian Q2 2026 data
  2. Experian, Average Car Paymentexperian.comUpdated Sep 10, 2026, Q2 2026 data
  3. Bankrate, Leasing vs Buying a Carbankrate.comUpdated Sep 16, 2026
  4. LendingTree, Average Car Payment and Auto Loan Statisticslendingtree.comNo date shown, Experian Q4 2025 data
  5. Federal Trade Commission, Financing or Leasing a Carconsumer.ftc.govJuly 2022, last modified Jun 30, 2026

Estimates are for general information only. Get written quotes from licensed local pros before you decide.

Sepehr Parsa
Written by
Sepehr Parsa · Founder and Editor · Financial Planner
  • Passed Level II of the CFA® Program
  • Canadian Securities Course (CSC)
  • Conduct and Practices Handbook (CPH)

Sepehr Parsa is a financial planner and the founder and editor of DollarMap. He has passed Level II of the CFA Program and completed the Canadian Securities Course (CSC) and the Conduct and Practices Handbook (CPH) course. He writes and edits our guides on cars, home repairs, budgeting, saving and investing, and checks that every number has a source.

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